NAR Consultants to Review Colo. Eminent Domain Statutes: Local governments in some states are using eminent domain to buy underwater mortgages and reduce property owner debt by refinancing the loans. FHFA has condemned the practice, which is in use in Richmond, CA and is under consideration in other cities from Seattle to Newark.
The NAR Board of adopted a policy position opposing the use of eminent domain by localities at its November 2013 Directors meeting. NAR understands the need to help struggling homeowners, but argues that taking mortgages hurts the availability and affordability of financing for borrowers because of the uncertainty it creates for lenders and investors.
While CAR assumes the practice would not be legal in Colorado, it is taking no chances. CAR is applied for analysis of our state statutes through the NAR land use initiative. NAR consultants will analyze Colorado law and determine if current statutes are sufficient to prohibit this practice in our state.