White House Skeptical of Plan to Seize Mortgages by Eminent Domain

The Obama administration has concerns with a proposal—backed by a one-time major fundraiser to President Barack Obama—that would use eminent domain to seize and restructure mortgages, according to a White House official.

The eminent-domain gambit is being advocated by Steven Gluckstern, the chairman of Mortgage Resolution Partners, a San Francisco-based venture capital firm that has been the guiding force behind three California municipalities that are considering the approach.

Mr. Gluckstern, an entrepreneur and former insurance executive, took an early role as a major fundraiser for President Barack Obama shortly after the then-Illinois senator announced his White House bid in 2007.

Mr. Gluckstern and his wife hosted Mr. Obama at their Manhattan home for a fundraiser in April 2007. A photograph from New York Magazine shows Mr. Gluckstern standing next to another prominent financier and philanthropist: George Soros, who is seated in the photograph to the left of Mr. Obama. They held another Obama donor event featuring former President Bill Clinton one month before the 2008 election (Mr. Clinton filled in for Vice President Joseph Biden, who had suspended campaigning for a few days after the death of his mother-in-law.)

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