A Little-Discussed Aspect Of The Eminent Domain Dispute

Law360, New York (August 19, 2013, 3:44 PM EDT) -- Oh, if it only were that easy. A city seizes “underwater” residential mortgage loans through eminent domain, waves its magic wand, says abracadabra or bibbidi bobbidi boo, and then the mortgage lien of the prior loan holder evaporates into thin air. The city is free to write down loan principal and, for a fee, arrange for private interests to refinance the no longer underwater loan for a grateful borrower. In this land of make-believe, the prior holder accepts the city’s offer of reasonable compensation without a...
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