Government officials in Sacramento and Elk Grove are giving a good look at the possible use of eminent domain as a way of helping out struggling homeowners who are still making their mortgage payments despite being underwater on their loans.
Mortgage Resolution Partners (MRP), the same San Francisco based group of investors advising officials in San Bernardino County, along with the cities of Fontana and Ontario in Southern California, is promoting the same plan for this instance, reported The Sacramento Bee.
While mortgage industry officials are hot under the collar over the idea of using eminent domain in these cases, the local government officials in both the Northern and Southern California regions, along with Chicago and other areas of the country hard hit by depressed home prices, are desperate for solutions they can implement at the local level instead of waiting for help from the federal and state government that has been slow to arrive, the Bee explained.
The general concept behind the law of eminent domain is that government may take someone’s private property and put it to a public use (normally streets, highways, bridges, etc.) so long as just compensation is paid for the taking.
At issue in these cases is the definition of what constitutes a “taking of private property.” The usual scenario in eminent domain cases centers around taking someone’s physical land/home. These cases center around the taking of an intangible asset — a mortgage, which Steven Gluckstrn, chairman of MRP, said is allowed.
Lawyers on both sides of the issue are having a heyday with this one as more and more cities and counties around the country explore untested legal territory.
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