The current housing crisis has affected homeowners in several critical ways. In recent times, many families facing foreclosure have had trouble obtaining help from lenders. But there is a potential alternative to the current climate; several cities have already looked into a concept called power of eminent domain, which would potentially enable them to rescue their ailing real estate markets.
One Massachusetts city recently proposed a bold move that may, if enforced, offer hope to many homeowners in their town. With median house prices falling from around $260,000 in early 2007 to roughly $120,000 at the time of publication, the town has also seen a serious drop in home sales in the same period.
A vote was held by the city council in the town of Brockton to commission a study into the practicality of using the power of eminent domain to alleviate the town’s foreclosure problem. Brockton, located south of Boston, is considering adopting the controversial strategy, which would see the city taking control of foreclosed properties from their lenders and selling them.
The potential move has been met with strong opposition from lenders when the idea has been explored in past situations, with some lenders essentially saying they would boycott markets where city governments use eminent domain. Nevertheless, the founder of a new company that would facilitate the purchases said that he hoped the city’s measure would “do a good thing for America,” as well as bring in a return on any money invested.
For homeowners facing foreclosure, Brockton’s approach would prospectively offer significant help. Unfortunately, many families reside in cities in which the power of eminent domain is not being considered as an option. For these people, the prospect of losing their properties can seem inevitable. However, if they gather as much information as possible about their legal options, they may be able to increase their chances of remaining in their homes.
Source: Mortgage News Daily, “Another city looks at eminent domain as solution to foreclosures,” Jann Swanson, Jan. 14, 2013