Saturday, February 2, 2013

San Bernardino County Scraps Thoughts Of Using Eminent Domain To Bail Out Underwater Homeowners

In San Bernardino, California, the Contra Costa Times reports:

  • More than seven months after announcing it was entertaining a proposal to use eminent domain to acquire underwater mortgages to help stabilize the local housing market, a San Bernardino County joint powers authority on Thursday rejected the proposal.

    The proposal, rolled out by San Francisco investment firm Mortgage Resolution Partners last summer, intrigued cities and counties across the nation hardest hit by the subprime mortgage crisis and garnered national opposition by the real estate and mortgage industries, which joined forces in an effort to stop the proposal in its tracks.

    But it was potential risk and a lack of community support, not threats of litigation and the cutting of credit to homebuyers in San Bernardino County, that prompted the Homeownership Protection Program - the joint powers authority (JPA) composed of the county and the cities of Fontana and Ontario - to back away from the proposal, said Greg Devereaux, chief executive officer of both the county and the JPA.

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