Professor David Reiss discussed new mortgage plans being implemented by local governments across the country in a recent op-ed for the National Law Journal. He supports the proposals, which restructure “underwater” mortgages, calling them “constitutional, beneficial, and administratively feasible.” The financial industry at large, however, fears that this kind of restructuring at the local level will cause a collapse.
Professor Reiss explains that local governments have every right as a result of eminent domain to try to stabilize their communities in such a way. “The bottom line is that preventing mass foreclosures, with its implications for halting blight, keeping property tax rolls healthy and maintaining vibrant communities, is an obviously legitimate public purpose that is consistent with the relevant Supreme Court precedent.”
Read the full article.