If you're not quite sure what eminent domain is, or if you just forgot, then let me refresh your memory. Eminent domain is “The compulsory purchase (as in, required by law, obligatory, mandatory, or in other words AGAINST YOUR WILL) to take private property (in this case your home) for public use by a state or national government. However, it can be legislatively delegated by the state to municipalities, government subdivisions, or even private persons or corporations when they are authorized to exercise functions of public character.... I don't know about you, but being forced out of my home by the government doesn't seem like a great idea to me, and now New Jersey homeowners are on boat with (a watered down version of eminent domain) to (possibly) save them from losing their homes? Are you seeing an awkward paradox here...? (WHAT THE HECK NEW JERSEY?!).
Ok, ok, let's stop the dramatic antics, even though eminent domain (in its natural definition) sounds sadistic and sinister, Newark, New Jersey's government is planning to use it for homeowners' benefit. Apparently, there is a new process in the works that would “allow the township to seize underwater mortgages and restructure them on behalf of homeowners to make payments more affordable.” Hmm, sounds intriguing, what else?
“The program would also allow homeowners trapped in a certain type of mortgage, known as a Private Label Security or PLS Loans, to voluntarily participate in a program where the City purchases these mortgages from investors and repackages them at terms homeowners can afford. For most of the estimated 1,200 homeowners with these types of loans in Newark, the policy would save them from losing their homes to foreclosure.” - Martin Andelman
Not too shabby when more than “88,000 homes have been foreclosed on in New Jersey in the past four years – 6,810 homes in Newark alone, according to a report, Newark Homewrecker, by the activist group New Jersey Communities United (NJCU).”
Nevertheless, this is a new concept. Which in turn means lot's of research and work to be done to see if this idea could benefit the homeowner. Yet, this could ultimately be the little glimmer of hope, the shooting star, that can change the outcomes for thousands of New Jersey home owners facing foreclosure.
Now, did you ever imagine eminent domain had a good twin? Didn't think so...
Lastly, Martin Andelman from Mandelman Matters says,
“So today, I would have to say that Newark is to be commended for having the courage to draw the line and take control of their city’s destiny by becoming the first American city to say yes to the use of eminent domain as a way to deal with underwater loans and urban blight caused by the ongoing foreclosure crisis. But in addition, since there are reportedly some 26 other cities across the country that have been considering the plan, I would also have to imagine that Newark only represents the first domino to fall, in what could potentially become a long line of dominoes.”