Published: 07 July 2012 05:29 PM

A confidentiality agreement signed by San Bernardino County’s top executive required him to initially keep secret the details of a proposal to use eminent domain to seize underwater mortgages.

The county provided a copy of the agreement on Thursday, July 5, in response to a June 19 public records request from The Press-Enterprise. The request was filed after officials revealed that county Chief Executive Officer Greg Devereaux had entered into the agreement in February.

San Francisco-based Mortgage Resolution Partners, the idea’s proponent, has since given a waiver that allows county officials to discuss the proposal in response to media queries. The agreement, however, apparently still exempts all written communications between the two parties from public disclosure.

The idea of using government condemnation proceedings to acquire mortgages at current, lower market rates and reducing homeowners’ payments — a concept that hasn’t been tried elsewhere — has attracted controversy and national attention.

An open-government advocate said eminent domain is exactly the kind of policy that should be discussed in full public view.

The Board of Supervisors has been generally supportive of exploring the proposal, but on Friday, Supervisor Janice Rutherford said she is against it.

“I can’t support the use of eminent domain in this way,” she said, citing concerns about property rights.

Rutherford said she’s also worried about “unintended consequences,” such as those raised in a June 28 letter by 18 finance industry trade groups. They stated that voiding contracts between creditors and homeowners could make banks less willing to lend to other homeowners in the county.

Steven Gluckstern, chairman of Mortgage Resolution Partners, said he does not believe that will be the result.

“The response from the financial community is not unexpected,” he said. “I believe if they learn more about the program, everybody is better off with a solution that clears the market of these underwater mortgages.”

He acknowledged that the idea is controversial but said it’s one that he believes “will improve the overall quality of life in the community.”

Board Chairwoman Josie Gonzales said she favors fully exploring the proposal. The county needs to find a way to help homeowners, she said. More than 150,000 San Bernardino County homeowners owe more on their mortgages than their properties are worth, according to the county.

“We definitely cannot quit until we get all of that information and, based on that information, make a sound decision on what we’re going to do,” Gonzales said.

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