By Martha Neil | ABA Journal
A venture capital firm’s bid to help some struggling homeowners avert foreclosure by using the government’s eminent domain power to purchase their property at actual value is gathering steam.
Several cities in California have agreed to pursue the idea, and others, including North Las Vegas, Nev., are pondering the plan, too, according to the Las Vegas Review-Journal and the San Francisco Chronicle (sub. req.).
Not all homeowners in those cities will qualify to participate in the program, which targets homes that are now worth significantly less than their mortgaged value. The plan envisions negotiating a favorable purchase price under eminent domain, say $120,000 for a home mortgaged at $300,000 that is now worth roughly half that amount, then offering the homeowner a Fair Housing Administration-backed mortgage on favorable terms.
