Industry warns eminent domain plans dangerous for investors, markets

04/30/2013 | Forbes

Representatives for the securities industry will be in California and Nevada this week in an effort to squash plans to use eminent-domain authority to seize mortgages. Industry experts are raising concerns about the plans, which depend on taking loans out of private-label securities trust and reselling them to the Federal Housing Administration or other agencies. "Even FHA has some underwriting standards," said Tim Cameron, head of SIFMA's asset management group. "If a city seizes a nonperforming loan, they own it. The theory only works if they can refinance it." Get the facts at SIFMA's Eminent Domain Resource Center.

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