Date: April 28, 2014
To: Senator Crapo and Senator Johnson
Filing Type: Hill
Description: The undersigned trade associations representing the entire spectrum of participants in the housing finance system are writing today to encourage your support for the amendment to S. 1217 put forth by Senators Toomey and Coburn which defuses once and for all the threat posed by a new eminent domain scheme which could devastate investor confidence in our mortgage markets. Numerous communities across the country are considering entering into an agreement with an investment fund that envisions using a municipality’s eminent domain power to acquire performing but underwater mortgage loans held by private-label mortgage-backed securities (PLS) and then refinance the loans through programs administered by the Federal Housing Administration (FHA). We believe these actions would severely impact the return of private capital to the mortgage markets, and would therefore undermine any chance of success of the new system as envisioned in S. 1217.