Since our last update at the beginning of this year, Irvington, New Jersey has taken a small step toward the use of eminent domain to acquire underwater mortgages. In late March 2014, the Council of the Township of Irvington, in a 6 to 1 vote, approved a resolution calling for the Township’s Planning Board to “identify properties ‘in potential foreclosure that may be designated as areas in need of redevelopment,'” according to Eunice Lee’s article in The Star Ledger.
The Township’s resolution authorized “the [P]lanning [B]oard to prepare a redevelopment plan targeting 199 ‘underwater’ mortgages held by private investment groups, with the goal of acquiring them and offering better deals to the borrowers,” as reported by Joseph Tyrrell in the NJ Spotlight.
According to The Star Ledger, “Irvington would pay the mortgage holders’ fair market value and then restructure mortgages into lower principal payments that are more favorable for homeowners.” While the Township of Irvington has not yet actually begun condemning underwater mortgages, it has taken a small step in that direction with its resolution.
Stay tuned to our blog for further updates!