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Eminent domain solution rejected
After months of controversy and opposition from the finance industry, a San Bernardino County agency declared Thursday, Jan. 24 that it would not use eminent domain to acquire underwater mortgages.
Much of the discussion of a joint powers authority – made up of the county and cities of Fontana and Ontario – had been focused on a novel proposal from a San Francisco investment firm to use that strategy to aid homeowners struggling to make payments where they owe more than their properties are worth.
The five-member joint powers authority board voted unanimously Thursday to solicit proposals that could help such homeowners but specifically ruled out the use of eminent domain.
County Chief Executive Officer Greg Devereaux, who also chairs the authority, cited concerns raised by opponents that allowing local government to seize mortgage notes could have a chilling effect on the lending industry in his recommendation not to pursue the plan.
“It would be wrong for me to introduce that risk to the community without the community saying we want to take that chance,” Devereaux said. “That level of support has not materialized. Had it, maybe it would be a different discussion.”
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Imran Ghori is a reporter with The Press-Enterprise/PE.com. You can reach him at firstname.lastname@example.org. For more Inland Southern California news, log on to PE.com.