Sunday, September 16, 2012

Calif. Lt. Gov Calls For Federal Probe Into Threats Targeting Local Communities Considering Use Of Eminent Domain To Restructure Underwater Mortgages

Reuters reports:

  • California Lieutenant Governor Gavin Newsom says he wants the U.S. Department of Justice to investigate "threats" against local communities that are considering using eminent domain to seize and restructure poorly performing mortgages to benefit cash-strapped homeowners.

    Newsom sent a letter on Monday to U.S. Attorney General Eric Holder asking federal prosecutors to investigate any attempts by Wall Street investors and government agencies to "boycott" California communities that are considering such moves.

    "I am most disturbed by threats leveled by the mortgage industry and some in the federal government who have coercively urged local governments to reject consideration" of eminent domain," he wrote in a letter that was also sent to Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke.

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