Chicago Mayor Rejects Eminent Domain Plan

Posted by Orb Staff on August 15, 2012 No Comments
Categories : Mortgage Servicing

12203_rahm Chicago Mayor Rejects Eminent Domain Plan Chicago Mayor Rahm Emanuel has come out against the idea of using eminent domain laws for seizing underwater mortgages in order to restructure and resell them.

The Chicago Tribune reports that the mayor's rejection of the eminent domain plan came while Chicago aldermen were holding a committee hearing to weigh the pros and cons of the proposal, which has been floated by San Francisco-based Mortgage Resolution Partners.

Steven Gluckstern, a co-funder of Mortgage Resolution Partners, claims that the plan would help between 16,000 and 20,000 Chicago families. However, Emanuel stated that this was the wrong approach to the city's ongoing housing problems.

‘I don't think it's the right way to address the problem,’ Emanuel said during a press conference. ‘I just don't think that's the right instrument.’

The eminent domain proposal has created controversy in California, following the decision of San Bernardino County and two municipal governments to form a joint powers authority that would put the plan into action. The proposal has been severely criticized by trade associations representing the financial services industry, and the Federal Housing Finance Agency has expressed its concerns on the plan's design.

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