FHFA Raises Flags Over Eminent Domain Home Loan Seizure

Law360, New York (August 8, 2013, 4:01 PM EDT) -- Federal mortgage financing regulators may sue states that invoke the controversial principle of eminent domain strategy to seize home loans, the Federal Housing Finance Agency said Thursday in the wake of the city of Richmond, Calif.’s proposed mortgage seizure program.

The FHFA’s completed year-long review of the use of eminent domain to restructure loans has left the regulator with “serious concerns” about the practice, according to its statement Thursday, which said also that the use of eminent domain threatens the stability of Fannie Mae, Freddie Mac...
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