House and Senate appropriators want the Federal Housing Administration to keep them informed about any developments that would involve the refinancing of mortgages seized by local government through the exercise of eminent domain.
One company advocating the use of eminent domain to condemn underwater mortgages plans to refinance the loans through the FHA short refinance program.
Although no jurisdiction has yet to seize a mortgage “the committee will continue to monitor developments in this area and expects FHA to keep the committee informed” of its policies with respect to eminent domain, according to a Senate Appropriations Committee report.
The Senate appropriators attached this report to a bill that funds the Department of Housing and Urban Development’s operation for fiscal year 2014.
House appropriators also are “concerned” about the use of
The committee directs HUD to submit a study on the “effect that risk of eminent domain for these purposes will have on the housing market.”
The study covers the risk to the “FHA primary and refinance market, as well as the broader mortgage market, interest rates, homeownership and affordability.” The due date for submitting this report is April 1, 2014.
