Flawed Eminent Domain Proposal Still Being Pushed
“As a recap, the proposal was put forward by Mortgage Resolution Partners (MRP), a private investment firm. MRP wants to help cities and counties develop plans to condemn underwater mortgages so that the local government can seize the mortgages from the mortgage servicers under the power of eminent domain. The principal would be written down and then MRP would then refinance the loan (at a profit for its investors).
After yesterday’s panel in which MRP’s chairman, Steven Gluckstern, attempted to defend the proposal, it remains clear that there are numerous problems with the proposal. Gluckstern did clarify, counter to the concerns in the comment that only privately serviced loans would be targeted by this proposal (not Fannie Mae or Freddie Mac loans). Despite this clarification, Tom Deutsch, executive director for the American Securitization Forum still expressed concern as to what the cost would be to the taxpayer if this proposal were extended to federal loans.”
Hughey, Jason. Americans for Prosperity 9 January 2013.