North Las Vegas has rejected a proposal that involved using eminent domain to seize underwater mortgages in order to provide relief to distressed borrowers.

The banking industry has fiercely opposed such proposals, arguing that they would increase borrowing costs for homeowners.

In late July, Richmond, Calif., sent out letters to owners and servicers of loans offering to buy a batch of distressed mortgages. It said it would use eminent domain to seize them if those owners and servicers did not agree to sell them.

Source: Reuters

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