Eminent Domain To Save Property Owners From Foreclosure?

by Joseph Grather / New Jersey Condemnation Law 

Will eminent domain be allowed to seize “underwater” mortgages?  Opposing viewpoints appear to be coming up every day:

A recent National Law Journal blog suggested that the practice would be legal and according to its title: ”Eminently Reasonable.”

Dana Berliner is the head of Litigation at The Institute for Justice and a direct link to her posting on Double Think is here.  Berliner concludes that “the proposed use of eminent domain for mortgages violates state statutes and state constitutions.”  However, she also issues a warning to property owners: “If it can happen to mortgage investors, it can happen to you.”
Reason.org apparently sides with the Institute of Justice in its Case Against Using Eminent Domain to Acquire “Underwater Mortgages“ posting.
Meanwhile, a California Congressman has introduced legislation to halt this procedure from being used, even before it starts, and federal loan regulators have invited comments from interested parties before issuing any type of decision or finding.
Our earlier blog post on this issue is available here.
We’ll keep you posted.
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Originally published by New Jersey Condemnation Law; republished with permission

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