NEW YORK (CBSNewYork/AP) — New York City Council members and housing advocacy groups called on Mayor Bill de Blasio Wednesday to help homeowners who are at risk of foreclosure.
City Council members at a news conference Wednesday asked the city government to use eminent domain to buy back mortgages where homeowners owe more than their houses are worth.
Under the proposed plan, city government would purchase the mortgages from banks and refinance them to match the home’s value to prevent foreclosure.
About 60,000 New York City mortgages are still “underwater” from the burst of the housing bubble in 2007.
Councilman Donovan Richards (D-31st) said the city could save billions of dollars in the long run and help many African-American and Latino homeowners.
But the New York Bankers Association said using eminent domain would negatively affect mortgage credit and the housing recovery.
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