We've been over this territory before:
- Farpotshket Alert: Plan To Take Mortgages By Eminent Domain Is Back
- Surprise - New Article In Mortgage Resolution Partners Law Review: Use Of Eminent Domain To Take Mortgages OK!
- Mortgage Taking Tuesday - Mission: Impossible?
- Materials And Links From Today's ALI-CLE Presentation On Condemnation Of Underwater Mortgages
- Mortgage Taking Update: New Front Potentially Opening
- Preliminary Injunction Briefs In Richmond Underwater Mortgage Takings Challenge
- New FOIA Complaint Seeks Information About Underwater Mortgage Eminent Domain Issue
And now, in an effort to convince New York City to go down the lets-take-underwater-mortgages-by-eminent-domain path, Cornell lawprof Robert Hockett, whose brainchild this is, has published "'We Don't Follow, We Lead': How New York City Will Save Mortgage Loans by Condemning Them" (Nov. 29, 2014) in the Yale Law Journal Forum. From the piece's Introduction:
Many cities across the nation have begun to consider exercising their eminent domain authority to purchase, then write-down principal on, otherwise unmodifiable home mortgage loans facing foreclosure. I and several others have advocated this method and cognate uses of government authority to stabilize troubled housing markets for some years now, but the eminent domain approach to the problem nevertheless remains unfamiliar to many people. This is likely to change in the coming months. I recently joined New York City Council members on the steps of New York City Hall as they announced their intention to embrace some version of the eminent domain plan to address the City’s negative equity challenges. If they and fellow Council Members follow through on that intention, then many more Americans are likely to hear about the plan. This plan calls for cities to purchase “underwater” mortgage loans out of securitization trusts in order to prevent foreclosures, stabilize communities, and benefit (or avoid harming) mortgage investors in the process.In this Essay I hope to explain why the eminent domain plan is necessary in New York and other cities, how the plan works, and why it is sound as a matter of law and policy. Part I addresses the plan’s necessity. Part II covers the plan’s basic mechanics. Part III discusses the plan’s legal grounding and policy propriety. Part IV concludes.We can't say we agree, but this is still a worthy read, especially if this issue becomes hot again.
