Eminent Domain and Private Property Rights
The protection of the right of citizens to secure their ownership of property is a core value of REALTORS®.
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.
Richmond, Calif., city officials approved a plan this week to become the first city in the nation to use their powers of eminent domain to seize underwater mortgages. But they may face huge backlash if they proceed, critics warn.
The Federal Housing Finance Agency is the latest to step in and threaten lawsuits to try to stop municipalities from using eminent domain to purchase underwater mortgages.
On Aug. 8, 2013 the Federal Housing Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac, released a statement on the use of eminent domain to restructure performing loans along with an analysis of the implications for Fannie Mae, Freddie Mac and the FHFA. NAR cautions that the impact of such proposals could have a chilling effect on lending in these municipalities and raised these concerns with the FHFA in 2012.