San Bernardino County is considering creating a Joint Powers Authority to address the ongoing mortgage crisis. The JPA would take over troubled mortgages and properties.
The plan calls for multiple jurisdictions – including the cities of Ontario and Fontana – to take over the loans on troubled assets through eminent domain. The loans could then be restructured to reflect current market values. Those restructurings could allow homeowners to afford their homes or even build equity in their homes again. Some hope it could be the key to eventual recovery in the real estate market.
Homeowners who have had their mortgages sold to private-label mortgage backed securities would be eligible for the relief. Of the 150,000 underwater homes in San Bernardino County, roughly 20 percent would be eligible. Those homes could be taken into this program, which would be bankrolled by venture capitalists and other private investors.
From the Inland Valley Daily Bulletin:
San Bernardino County will enter into a partnership with Ontario and Fontana to look into a program with a unique approach to assisting underwater homeowners — using eminent domain to seize ownership of their loans.
The Board of Supervisors agreed at its meeting today to form a joint-powers authority with the two cities to explore the development of the program, which may include acquiring loans on properties facing negative equity by either voluntary purchase or the use of eminent domain.
Read the full article here.