Eminent Domain Report

This underwater mortgage / eminent domain issue does not appear to be going away any time soon.  Along with eminent domain attorneys Robert Thomas from Hawaii, Casey Pipes from Alabama, and Tom Olsen from New Jersey, I spoke last Friday at the ABA Annual Meeting in Chicago -- one of the cities apparently considering the plan.  The presentation itself did not focus on the underwater mortgage plan, but many of the questions at the end did.  Indeed, the issue generated more buzz in the room, by far, than any other.

This week, the news is that the Federal Housing Finance Agency ("FHFA") has ...

Over the past few days, I've had several conversations and have received a number of emails concerning the underwater mortgage series I posted recently.

Rick Friess, one of my former colleagues, commented on the series and provided two additional sources of concern.  Because I suspect many people missed his comment, I'm copying it here:

I agree with your analysis, and I see at least two other reasons this plan will not work. First, many, if not most, of the loans are likely refiances, not purchase-money loans, so the lenders will have recourse against the borrower. Thus, if the lender is ...

In two previous posts, I've discussed the proposed plan to condemn underwater mortgages and have analyzed the plan's legality.

Today, I want to talk briefly about whether the plan makes sense -- and whether it would work.  To assist those who don't want to spend much more time on this issue, I'll start with the bottom line:  I think this is a bad idea and that it will not accomplish its intended goal.  I also think the plan carries some potentially harmful baggage.

So why do I think the plan will fail?  Pretty simple, really.  The entire premise behind the plan is to acquire loans at less than their ...

Today I want to focus on whether the plan to seize underwater mortgages through eminent domain is legal. Getting into this topic, in my view the debate should not focus on whether this plan passes constitutional muster at the federal level.  I've seen much written on this subject, but I really think this is a red herring, and that the answer is pretty easy.   While others disagree, I believe the plan passes constitutional muster at the federal level.

The U.S. Supreme Court has issued a long line of cases that all make pretty clear that the government could constitutionally condemn ...

Anyone who follows eminent domain issues no doubt by now has heard about the plan of some government agencies to condemn underwater mortgages -- essentially as a mechanism to refinance those loans to give borrowers loans that better reflect the current fair market value of their homes.

There has been much debate on the issue, and it has included a whole lot of rhetoric that has started to look a bit like an election campaign. I've heard extreme arguments both in favor and against the plan.

My intention here is not to advocate for or against the plan. Rather, I hope to help better -- and more ...

The parade of lawsuits involved in the redevelopment dissolution process continues to grow.   Here are a few quick updates:

• Five San Diego County cities have sued the state over AB 1484.  Chula Vista, National City, Oceanside, San Marcos and Vista have joined forces to attack the law.
• In Northern California, El Cerrito has also sued, claiming the "true up" payment it purportedly owes ($1,756,794.67) is unlawful.  Read more about the El Cerrito lawsuit in the July 17 El Cerrito Patch article, City Sues State, County Over $1.76 Million "Demand for Payment".  Other cities have also reportedly ...

A new Court of Federal Claims opinion was handed down this month coming right out of our own Southern California backyard.  The case, Stueve Bros. Farms, LLC v. the United States, deals with whether a "physical taking of title" has occurred when a government agency's activities create a risk of flooding.  The answer, according to the Court, is no.

Stueve Bros. Farms owns property in San Bernardino County within the Prado Dam Flood Control Basin.  In the 1940's, the federal government condemned flowage easements over the property to an elevation of 556 feet above sea ...

Ever since the Supreme Court issued its decision in the Matosantos case last December, facilitating the dismantling of California's redevelopment agencies, there has been talk of new legislation -- either in the "clean up" variety or in the substantive overhaul variety. 

Today, the Legislature passed AB1484 as a budget trailer bill (the Senate approved the bill at around 1:30 p.m., and the Assembly followed about an hour later).  

AB1484 probably qualifies as too substantive to be characterized as mere "clean up," though it falls short of a major overhaul of the system.  And it ...

A few odds and ends for our readers:

• New Federal Eminent Domain Legislation:  According to the Eminent Domain Law Blog, two Senators have introduced a new bill, Protection of Homes, Small Businesses, and Private Property Act of 2012.  This, again, you may ask?  What ever happened with HR 1433, the Private Property Rights Protection Act of 2011?  HR 1433 appears to be dying a slow death, but the new 2012 bill seeks to pick up the slack.  In particular, it is targeted at the same issue:  preventing the federal government from using its eminent domain power and state and local ...

The International Right of Way Association's (IRWA) International Education Conference in Seattle has just wrapped up, and boy was it a great event.  Over 1,200 right of way professionals from across the United States and Canada (along with some visitors from Japan, Uganda, Saudi Arabia, Thailand, and the UK) all in one location for four days.  What could be better?  If you weren't able to make it, let me tell you that Alaska and Canada -- two chapters vying for hosting the 2017 event -- sure know how to have a good time. 

As I travel home on my flight back to Orange County ...