Federal Agency May Block Mortgage Grab

Federal Housing Finance Agency sees risk in eminent domain scheme for underwater loans

The Federal Housing Finance Agency has "significant concerns" about a controversial idea floated in Chicago and elsewhere to stabilize communities by seizing and restructuring the mortgages of homeowners who are current but underwater on their loans.

The agency, in a notice sent to the Federal Register and released Wednesday, said it may need to take action "to avoid a risk to safe and sound operations and to avoid taxpayer expense."