But first things first.
What is the power of Eminent Domain and how can it be used to stop illegal mortgage foreclosures, reaffirm housing affordability, and redistribute billions in stolen equity to duped borrowers?
According to the Free Dictionary, "The Power of Eminent Domain is the power to take private property for public use by a state, municipality, or private person or corporation authorized to exercise functions of public character, following the payment of just compensation to the owner of that property."
Typically, the power of Eminent Domain is used to take private property needed to build a public road or public school. Sometimes, as in the case of Long Branch, NJ, the power of Eminent Domain was abused to take perfectly good (beachfront), single-family dwellings from their elderly and low-income owners at fire-sale prices and turn the prime "in need of redevelopment" real estate over to the (salivating) wealthy developers.
Mortgage notes, like the oceanfront cottages, are PRIVATE PROPERTY.
Mortgage notes (the personal promise to repay a debt secured by a mortgage lien on real estate) are technically private property. Private property that can be condemned for public benefit under the power of Eminent Domain. Once the demonstrated owner of the note seized under Eminent Domain has been paid just compensation, the designated public-benefit agency can modify the note to restore affordability and some lost equity to the borrower/homeowner.
Or, if the lawful owner of the note can't be identified or confirmed pursuant to the Uniform Commercial Code, payment and the amount remaining on the debt (if any) is very much in question. The way in which mortgage notes were originated, and then transformed from debt and a promise to pay into an asset, securitized and sold to investors, is coming under intense scrutiny... This may soon result in lawsuits filed by regulatory agencies who are coming under public fire for not being tough on the "too-big-to-fail - too-big-to-jail" activities committed by their former or future colleagues.
Many believe that there are hundreds of thousands - if not millions - of mortgage notes that were fraudulently originated between 2001 and late 2008, which may now (as then) be little more than worthless paper.
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