Eighteen banking, securities and housing groups have joined together to issue a warning to three California municipalities looking to use eminent domain as a way to seize troubled mortgages from investors.
According to a report from the Wall Street Journal, the group, led by the Securities Industry and Financial Markets Association, sent letters to the governments of Fontana, Ontario and San Bernardino, Calif. to object to the proposed "Homeownership Protection Plan." The group says the implementation of the plan would reduce their residents' access to home loans.
The municipalities are located in the Inland Empire, an area east of Los Angeles that has been hit particularly hard by the housing crisis.
Also in the group are the American Securitization Forum, and top banking lobbyists including the Mortgage Bankers Association and the American Bankers Association. Investors are also represented by the Association of Mortgage Investors.
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