Fitch Ratings in a report Friday warned that the potential mortgage-related use of
“If those communities are successful, similar plans might be replicated in other communities, broadening the impacts,” Fitch said in the report.
“We expect action on these plans to be slow and legally challenged,” the company added, citing a suit by investors against a city in California and an entity it is working who have been pursuing an eminent domain plan.
Fitch also noted that the Federal Housing Finance Agency’s said it may direct the government-sponsored enterprises to stop their activities in towns that use eminent domain to seize mortgages.
