Desperate times call for desperate measures. Six California cities and another in Nevada, all in the throes of a housing crisis born out of falling market values, have latched onto a quick-fix scheme to take underwater mortgages by eminent domain.
The idea among officials in the California cities that include Richmond, El Monte and Pomona, and in the Nevada town of North Las Vegas, is to take the mortgage debt, leave home ownership intact and refinance the debt at the customary 80 percent loan-to-value ratio, thereby reducing the amount outstanding, and with it, the likelihood of foreclosure.
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