Share
The Fiscal Year 2015 Omnibus Appropriations bill contained a provision which prohibits HUD, FHA, or Ginnie Mae's involvement in the eminent domain scheme developed by Mortgage Resolution Partners and considered by more than a dozen municipalities across the country. This scheme relies upon the refinancing of seized loans through FHA’s short refinance program and resecuritization through Ginnie Mae.
Section 236 of the bill would prohibit the FHA and HUD from using federal monies to facilitate the seizure of mortgage loans by a state or local municipality. The full text states:
“None of the funds made available in this Act shall be used by the Federal Housing Administration, the Government National Mortgage Administration, or the Department of Housing and Urban Development to insure, securitize, or establish a Federal guarantee of any mortgage or mortgage backed security that refinances or otherwise replaces a mortgage that has been subject to eminent domain condemnation or seizure, by a state, municipality, or any other political subdivision of a state.”
NAR will continue to work with state and local REALTOR® associations to educate municipal leaders on the potential impact of this type of scheme as it relates to the use of eminent domain.