Bloomberg Law | Can Cities Use Eminent Domain To Seize Mortgage Loans? (VIDEO)

July 19 (Bloomberg Law) — Almost 24% of homes with a mortgage in the United States are underwater, meaning that more is owed on the loan than the property is currently worth. A new company known as Mortgage Resolution Partners is proposing to work with municipal governments to use eminent domain to seize underwater mortgage loans and restructure them at a discount to the borrower. Eminent domain has never been used to obtain mortgage loans. Richard Leland and Robert Hockett talk with Bloomberg Law’s Lee Pacchia about the legalities surrounding this plan. Leland is a partner at Fried, Frank, Harris, Shriver & Jacobson LLP and is also an Adjunct Professor of Law at Hofstra University Law School and at the Columbia School of Architecture Planning and Preservation. Hockett is is a professor at Cornell University Law School and paid legal advisor at MRP.


2 Responses to “Bloomberg Law | Can Cities Use Eminent Domain To Seize Mortgage Loans? (VIDEO)”
  1. Ken Hansen says:

    Why is the company needed to “assist municiple governments”? Also, this helps no owner who has allegedly defaulted.
    Changing the Bankruptcy code, forcing banks to cramdown are superior policy, but because we aren’t in a Democracy, the “rulers” won’t allow this. Their most ridiculous lie is that it will harm the taxpayers.

  2. robert wade says:

    Eminient Domain question might be what takes place when ownership of the mortgage cannot be found or established for the record ? what will be the action of the parties of mortgage for if ownership is not established? How can a payoff or new mortgage be created without conflicts arising from this action?

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