2-20-2015: Colorado legislature is contemplating Bill #15-114 which limits the state’s right to exercise eminent domain for just “open space” and other uses in support to protect private property rights.
11-6-2014: Eminent domain is a process where the governmental authority takes possession of your private real property for “public benefit” of some kind and is supposed to pay you “fair market value” of the property. Inverse condemnation is an offshoot of eminent domain where the property owner sues the applicable governmental authority for condemnation or depriving an owner of its use and value and pays damages.
Some local governments are using eminent domain to take property (with severly underwater mortgages) away from banks or lending institutions at current market value and refinancing the property to the current owner.
update 8-10-2013: Richmond CA wants to be the first to use eminent domain to restructure underwater mortgages and could set the stage or future implementation…Fannie and Freddie would stop buying mortgages where eminent domain is used… Source: http://www.clarionledger.com/article/20130810/OPINION01/308100004/Negotiating-better-than-taking-underwater-housing-market?nclick_check=1
Even though it’s an interesting tact to execute, do we reaally want our local governments with the power to rewrite contract law through eminent domain even when it keeps a homeowner in it if the “price is right”?
By the way, Mortgage Resolution Partners (MRP) has been promoting the plan as a means to allow people to stay in their homes…and MRP would receive a fee to assist in the repackaging of loans seized into new debt instruments sold to investors.
WSJ Opinion article “Fighting Foreclosures with Eminent Domain”, page A-13 on July3 2013.
WSJ article on page A6 of 6-21-2012 issue.