Under a joint authority, San Bernardino County has proposed the use of eminent domain to help homeowners with distressed mortgages. Rather than seizing homes, however, the county and several towns in it intend to seize the mortgages, replacing those mortgages with more affordable ones that would reduce the homeowners' debts and allow them to keep their homes. This proposal has invoked the threat of litigation by the American Securitization Forum and a warning by the Securities Industry and Financial Markets Association (SIFMA) that it could result in mortgage lenders boycotting the financing of homes in the county.
In an official statement released to Reuters, Lt. Governor Gavin Newsom publicly called on SIFMA to "cease making threats to the local officials of San Bernardino County." Newsom stated that while the use of eminent domain to seize mortgages is aggressive, it deserves a fair hearing. Due to San Bernardino County's high foreclosure rate, Newsom added, "We must think big and help our local governments develop solutions -- because the industry and federal government have not."
Eminent domain has been the traditional method governments use to seize property needed for highways, infrastructure, and other public projects. The use of eminent domain to seize and reduce mortgages was designed by Mortgage Resolution Partners in San Francisco. Chicago, and Berkeley, Calif., have also passed resolutions to hold hearings on the use of eminent domain to seize mortgages, which SIFMA and other organizations promise to fight, stating that it is unconstitutional and would negatively impact mortgage markets.
Anna Cuevas, ex-bank executive turned homeowner advocate known as "America's Loan Modification Guru," has empowered and guided thousands of Americans in keeping their homes from foreclosure through loan modification self-advocacy. A popular blogger (askaloanmodguru.com), Cuevas has been called a "superhero of the loan modification industry" and has been nominated for CNN's Heroes. She is the #1 bestselling author of SAVE YOUR HOME Without Losing Your Mind or Money.