Today’s American Banker has a story on the latest development in the let’s-use-eminent-domain-to-take-underwater-mortgages scheme: the Federal Housing Finance Agency has sent a strong shot across the bow of local governments contemplating such a move (e.g., San Bernadino, Chicago, even Berkeley):
Uh, don’t.
Full statement here, or below. The American Banker story is unfortunately behind a paywall, so we can’t bring it to you here, but we do have the highlights from a trio of Owners’ Counsel of America commentators who are quoted, us included:
“San Bernardino County cannot condemn federal property,” said Gideon Kanner, professor of law emeritus at Loyola Law School in Los Angeles and a longtime eminent domain expert. The FHFA is “a federal agency and the Feds can take the property of a state or city but the state or a local entity cannot take federal property.”
Robert Thomas, an attorney at the

