A controversial and creative plan being considered in San Bernardino wasn’t originally publicized due to a confidentiality agreement. The plan would call for the County to use its eminent domain powers to take control of underwater mortgages.
After the County would take over the mortgages, a group of private investors would offer new terms on the mortgages, re-financing them for less than the current market value. The lead group, Mortgage Resolution Partners, required the County CEO to signed the confidentiality agreement. But they have since granted an exemption to that agreement to allow county officials to discuss some of the details with the public.
The details of the plan would call for a new use to eminent domain. It has already elicited the ire of finance groups. The city received communications from 18 major financial institutions about the proposed program. They said that the government’s intrusion in voiding contracts between lenders and consumers could undermine banks willingness to lend in the county in the future.
From the Press Enterprise.com:
A confidentiality agreement signed by San Bernardino County’s top executive required him to initially keep secret the details of a proposal to use eminent domain to seize underwater mortgages.
The county provided a copy of the agreement on Thursday, July 5, in response to a June 19 public records request from The Press-Enterprise. The request was filed after officials revealed that county Chief Executive Officer Greg Devereaux had entered into the agreement in February.
Read the full article here.