Can Cities Use Eminent Domain To Seize Mortgage Loans?
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.