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Regulator May Act Against Eminent Domain Plan

August 14th, 2012 Comments off

fhfa-logo-headerReuters tells MHProNews that the Federal Housing Finance Agency (FHFA) raised concerns about a private investor group’s controversial aim to seize and restructure poor-performing mortgages. The federal housing regulator of the GSEs said it is concerned about the program’s constitutionality. “FHFA has significant concerns with programs that could undermine and have a chilling effect on the extension of credit to borrowers seeking to become homeowners and on investors that support the housing market,” the agency said in a statement. Edward DeMarco, the acting director of the FHFA, has objected to principal reductions on mortgages. DeMarco told reporters “the anticipated benefits do not outweigh the costs and risks.” Concerns about costs to taxpayers was also expressed. Mortgage Resolution Partners, a San Francisco-based group backed by some prominent West Coast financiers, is promoting the concept. Eminent domain traditionally has been used by local governments to condemn buildings and properties for public works projects. A related column in Industry Voices can be found here. ##

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