Calif. Lt. Gov. Seeks DOJ Help Against Anti-Eminent Domain ‘Threats’

Posted by Orb Staff on September 11, 2012 No Comments
Categories : Mortgage Servicing

12367_gavinnewsom Calif. Lt. Gov. Seeks DOJ Help Against Anti-Eminent Domain 'Threats' California Lt. Gov. Gavin Newsom is calling on the U.S Department of Justice (DOJ) to investigate what he calls ‘threats’ against communities in the state that are considering the use of eminent domain laws to reanimate local housing markets.

According to a Reuters report, Newsom is charging that Wall Street investment firms and federal agencies were bullying California communities that were considering the eminent domain plan proposed by Mortgage Resolution Partners, a San Francisco-based organization run by Steve Gluckstern, a former executive for Warren Buffett's Berkshire Hathaway Insurance Group and a major donor to President Obama's re-election campaign. Under the plan, local governments would evoke eminent domain laws to seize performing underwater mortgages, restructure the loans and resell them to investors tied to Mortgage Resolution Partners, which would receive a fee for the transaction.

‘I am most disturbed by threats leveled by the mortgage industry and some in the federal government who have coercively urged local governments to reject consideration [of eminent domain],’ Newsom wrote to U.S. Attorney General Eric Holder.

Newsom added that although he was not officially endorsing the use of eminent domain, he believed that California communities had the right to ‘explore every option â�¦ without fear of illegal reprisal by the mortgage industry or federal government agencies.’

This is the latest accusation by Newsom, a former San Francisco mayor, of threats against local governments in the state. In July, Newsom warned the Securities Industry and Financial Markets Association (SIFMA) to ‘cease making threats to the local officials of San Bernardino County’ over their consideration of the eminent domain strategy.

‘We cannot allow Wall Street, who exploited the housing market for financial gain, to kill an idea before it is given a fair hearing,’ said Newsom in his criticism of SIFMA, adding that the California communities considering the eminent domain strategy ‘have no choice in these desperate times.’

Register here to receive our Latest Headlines email newsletter




Leave a Comment