Eminent domain stalls as mortgage solution
For a look at why the use of eminent domain as a tool to modify mortgages remains a big issue, let's turn to the High Desert Daily Press in California.
It reports that a majority of homeowners in the High Desert of San Bernardino County -- one areas hardest hit by the mortgage crisis -- are still reeling, even as other areas in California seem to be improving.
The paper reports that, "More than 60 percent of homes in the desert are underwater."
Modification and short-sale solutions remain hard to come by in these parts, where many refugees from large cities moved, bidding up real estate prices dramatically.
"Owners of these homes either have to keep paying high mortgages or walk away. The latter could trigger another wave of foreclosures, posing a threat to the local economic recovery, which is already slower than the coastal regions."
Some people continue to think that eminent domain remains the only solution. Indeed, the idea seemed to really get off the ground in San Bernardino County--and the entire country--about a year ago. But since then, the impetus on the county seems to be stalling. I do not expect this idea to take off anytime soon, even in areas that would benefit greatly from it. The securities implications are just too dire.
But once bond problems are out of the equation, people will have much less reason not to embrace eminent domain solutions to clean up the mess. A new Pennsylvania law allows local governments to take control of blighted properties and cancel tax liens and bank foreclosures so the land can be sold to responsible owners or developers.
- here's the article