Joe Nelson, Staff Writer
Posted: 09/14/2012 07:35:18 PM PDT
U.S. Rep. John Campbell, R-Irvine, introduced federal legislation Thursday aimed at blocking local governments across the nation from using eminent domain to seize underwater mortgages.
The Defending American Taxpayers from Abusive Government Takings Act, or H.R. 6397, would prohibit the nation’s top four mortgage lenders – Fannie Mae, Freddie Mac, the Federal Housing Administration and the Veteran’s Administration – from purchasing or guaranteeing loans in counties or cities that use eminent domain to seize underwater mortgages.
“Those four entities make or guarantee 97 percent of all home loans in the U.S. today,” Campbell said Friday. “If any city or county does this, no one in that city or county would be able to get a loan in the future. It would eliminate the ability for most people to get loans.”
San Francisco investment firm Mortgage Resolution Partners has pitched to cities and counties across the nation hardest hit by the subprime mortgage crisis a proposal to use eminent domain to seize underwater mortgages held in private-label mortgage backed securities, which are held in trust but bundled and sold in bulk to private investors.
To read entire story, click here.