Brockton considers plan to seize bad mortgages
“Brockton is exploring using eminent domain powers to seize bad mortgage loans that have devastated many residents and, with a private financial partner, sell them back at lower interest rates to help people keep their homes.
Known for having the highest foreclosure rate in the state, Brockton has 7,000 homeowners currently “underwater,” or living in homes that are valued below their mortgages, said City Councilor at Large Jass Stewart, who proposed the untested measure.
City officials said the study group will explore legal ramifications of the seizure measure and figure out who would coordinate it. Among those offering advice is Mortgage Solutions Partners LLC, a New York firm that helps communities acquire underwater mortgage loans and refinance them.
Some Brockton officials, including Mayor Linda Balzotti, say they have doubts about seizing mortgages by eminent domain.
Balzotti said she was deluged with calls from area banks and trade associations that said they would be reluctant to offer local financing in a city where properties might be taken by eminent domain. She also said she is not open to using public money for such a proposal.”
Bolton, Michele Morgon. Boston.com 2 Januaury 2013.