An Express Article from the California Land Title Association
Bulletin 13/14-47 - November 26, 2013
At its meeting on Tuesday, Nov. 19th, the Oakland City Council unanimously adopted a resolution avoiding the use of eminent domain to assist homeowners struggling to make their mortgage payments. The resolution, introduced by City Council President Pro Tempore Rebecca Kaplan, called on financial institutions to continue working with the City to negotiate principal reductions and avoid forcing families out of their homes.
The City Council’s decision to not move forward with an eminent domain proposal comes on the heels of two earlier resolutions that would have involved the use of the controversial foreclosure prevention tactic. CLTA has continued to work with the SIFMA Eminent Domain Working Group as it monitors Oakland’s investigations into the use of eminent domain, and are cautiously optimistic that the city will explore other avenues for now. In a press release issued on the 20th, the Oakland Mayor’s Office stated that the city is “still fighting for innovative solutions and building partnerships to help [its] residents”, but the City Council will “not pursue eminent domain.”
A vote held in Pomona, California, on October 21 to formally proceed with Mortgage Resolution Partners on an eminent domain proposal was tied at 3-3. At that time, the Pomona City Council unanimously voted to direct staff to obtain more information on the proposal. The issue of eminent domain has not been on the agenda for the City Council’s last two meetings.
In Salinas, a local editorial suggested that the city’s Housing Subcommittee would discuss eminent domain at its November 20th meeting. No such discussions were held.
In the meantime, 15 members of Congress have joined in a letter urging FHA to ensure that mortgages modified by eminent domain can access FHA programs. The letter states that principal reduction policies, if adopted by localities using the sovereign state power of eminent domain, are consistent with FHA’s support for principal reduction. The letter concludes by urging HUD to ensure that the current FHA programs will not discriminate against low-income borrowers “who seek short refinances of toxic underwater loans that American cities acquire through their powers of eminent domain.”
CLTA, as a member of the SIFMA coalition, will continue to monitor the ongoing consideration of eminent domain as a measure to prevent foreclosures by California cities.