Eminent domain may find new use to salvage urban homes
“Her lending bank, Wells Fargo, worked with her to modify the loan, bringing the monthly payments down by $49 a month. But the payments are still beyond her reach and her home is worth less than the mortgage amount, meaning she can’t sell, even if she wanted to.
Her last hope is that the city takes the property through eminent domain.
The Newark city council is expected to discuss the issue as early as this week.
Typically, eminent domain is used to seize a property that is a blight to the community and re-use it in a way that benefits everyone, such as building a highway or a park. In this case, however, the city would seize the mortgage — not the house. Under the law, the term “property” has a broad definition.
Newark would not be the landlord, but would give or sell the mortgage to a third party, which would pay the lender fair market value and then issue a new mortgage based on the property’s true worth.”
De Poto, Tom. The Star Ledger 28 July 2013.