Eminent Domain Bid for California Mortgages Rejected
“The local group, whose mission includes addressing the problem of underwater mortgages, rejected on Thursday the use of eminent domain as a way to restructure those loans, a win for banks and securities firms fighting the idea.
Members of the Joint Powers Authority, set up by San Bernardino county with representatives from the cities of Ontario and Fontana, said they would make a formal request seeking plans to improve on existing foreclosure-prevention programs.
But the use of eminent domain to address the problem won’t be part of that request, amid concern that it could destabilize an already weak Inland Empire housing market, said Gregory Devereaux, San Bernardino county’s chief executive. Community support for the proposal, which critics have said would raise costs and curb the availability of home loans, was lacking, he said.
“It’s wrong to impose that risk on the community without support from the community, and that level of support has not materialized,” Mr. Devereaux said. “We don’t want to do more harm than good in what we choose to do.””
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Yoon, Al. The Wall Street Journal Blog 24 January 2013.