[Calif. cities eye plan to seize mortgages AP] "Fontana, Calif. – In the foreclosure-battered inland stretches of California, local government officials desperate for change are weighing a controversial but inventive way to fix troubled mortgages: Condemn them.

Officials from San Bernardino County and two of its cities have formed a local agency to consider the plan. The securities industry has been quick to register its displeasure and say it will only make loans harder to get.

Discussion of the idea is taking place in one of the epicenters of the housing crisis, a working-class region east of Los Angeles where housing prices have plummeted. Last week brought another sharp reminder of the crisis when the 210,000-strong city of San Bernardino, struggling after shrunken home prices walloped local tax revenues, announced it would seek bankruptcy protection.

Now — and amid skepticism on many fronts — officials from the surrounding county of San Bernardino and cities of Fontana and Ontario have created a joint powers authority to consider what role local governments could take to stem the crisis. The goal is to keep homeowners saddled by large mortgage payments from losing their homes — which are now valued at a fraction of what they were once worth.

"We just have too much pain and misery in this county to call off a public discussion like this," said David Wert, a county spokesman.

The idea was broached by a group of West Coast financiers who suggest using the power of eminent domain, which lets the government seize private property for public purpose..." Full text: Calif. cities eye plan to seize mortgages Re 13:17

Seizing mortgages using eminent domain