if “public purpose” can be expanded like this who would ever lend mortgage money?
Californian city to use “eminent domain” to seize mortgages. Richmond in California has approved a plan for the city to become the first in the country to acquire underwater mortgages using the power of “eminent domain,” which enables governments to seize private property for a public purpose. The idea is for the council to work with investor group Mortgage Resolution Partners to make the loans more affordable for home owners and avert foreclosure. However, critics fear that the program could hurt the market for mortgage-backed securities, provoke lawsuits and endanger Richmond’s finances.