Comment on the Use of Eminent Domain to Restructure Performing Loans

Federal Housing Finance Agency (No. 2012–N–11) (2012)

6 Pages Posted: 13 Sep 2012

Date Written: September 11, 2012


There has been a lot of fear-mongering by financial industry trade groups over the widespread use of eminent domain to restructure residential mortgages. While there may be legitimate business reasons to oppose its use, its inconsistency with Takings jurisprudence should not be one of them. To date, the federal government’s responses to the current crisis in the housing markets have been at cross purposes, half-hearted and self-defeating. So it is not surprising that local governments are attempting to fashion solutions to the problem with the tools at their disposal. Courts should, and likely will, give these democratically-implemented and constitutionally-sound solutions a wide berth as the ship of state tries to right itself after being swamped by a tidal wave of mortgage defaults.

Keywords: eminent domain, residential mortgages, Kelo, Midkiff, taking, regulatory taking, condemnation, mortgage-backed securities, just compensation, public use

Suggested Citation

Reiss, David J., Comment on the Use of Eminent Domain to Restructure Performing Loans (September 11, 2012). Federal Housing Finance Agency (No. 2012–N–11) (2012), Available at SSRN: or

David J. Reiss (Contact Author)

Brooklyn Law School ( email )

250 Joralemon Street
Brooklyn, NY 11201
United States

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