IRVINGTON, N.J. (AP) — The idea of using eminent domain to fight foreclosures is gaining traction nationwide.
Irvington, N.J., last week became the second city to say it’s going to use the tactic. Richmond, Calif., was the first.
Cities including Chicago; Brockton, Mass.; and Yonkers, N.Y. have floated the idea, saying it’s a way to help underwater homeowners and diminish blight.
But it’s controversial. Banks, Wall Street and some in Washington are against it.
SIFMA is a group that represents banks and asset managers. Managing director Tim Cameron says investors who put money in mortgage-backed securities would be penalized by the proposal.
Eminent domain would only apply to private mortgages not backed by the U.S. government.