As those who have lost their homes to the country’s banks through shoddy and shady tactics continue to complain about their inability to get banks to assist them in saving their homes, San Bernardino County, the epitome of what the mortgage crisis has wrought, has come up with the most daring way to help the county’s residents save their homes, at the same time helping to save local neighborhoods.
San Bernardino is the first county in the country to consider using “Eminent Domain” to seize residential mortgages.
The County and two of its cities have formed a joint powers authority to consider eminent domain.
Today the Authority will consider seeking proposals from outside contractors to manage a homeowner rescue plan. The authority has the power to start a program without added county and city approvals, and will consider a range of options to help homeowners in trouble.
Part of the plan calls for seizing mortgages, writing down debt to the properties present value and refinancing the loans.
Eminent domain is usually reserved to seizing property, so seizing mortgages is unchartered territory.
There is certain to be legal challenges and as always the devil will be in the details, but in our view it’s an interesting proposition if for no other reason than it’s about time someone took on the housing crisis problem from the homeowner’s side.
Maybe, just maybe, San Bernardino County’s plan will create more willingness to do the same by other counties and mortgage companies.