Negative-equity crisis, Eminent domain, Foreclosure, Mortgage-backed securities, Mortgage crisis, Private-label securitizations, PLS loans, Real estate crisis, Underwater mortgages
Property Law and Real Estate | Securities Law
While it is widely recognized that the mortgage debt overhang left by the housing price bubble and bust continues to operate as the principal drag upon U.S. macroeconomic recovery, few seem to appreciate just how locally concentrated the problem is. This paper takes the measure of the national mortgage debt overhang problem as a cluster of local problems warranting local action. It then elaborates on one form of such action that the localized nature of the ongoing mortgage crisis justifies - use of municipal eminent domain authority to purchase underwater loans, then modify them in a manner that benefits debtors, creditors, and their communities alike.
Hockett, Robert C. and Vlahoplus, John, "A Federalist Blessing in Disguise: From National Inaction to Local Action on Underwater Mortgages" (2013). Cornell Law Faculty Publications. Paper 605.
Published in: Harvard Law & Policy Review, Vol. 7, No. 2 (2013).