Mortgages. How do they work?

[luzribeiro]

A curious story here. See, in the SoCal desert, one of those southern counties is trying to implement the "eminent domain" clause to rescue some of its towns. The whole idea is that the local authorities would be allowed to take a home that's sunken underwater, pay the bank the market price (more likely: less than the market price), and then re-finance it for the current resident. The purpose would be to avoid many areas mainly consisting of foreclosed (and now empty) homes turning entire areas into ghost-towns.

Article: http://www.bloomberg.com/news/2012-06-28/eminent-domain-is-bad-ploy-for-underwater-mortgages.html

...And some comments.