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ON THE WEB KNOW WEBSITES TO FED REPORT PROPOSES USE OF EMINENT DOMAIN FOR UNDERWATER MORTGAGES RES.NET RES.NET launched a new website to make it even simpler for the many parties of a property sale to connect and move transactions forward. Distressed sellers, agents, servicers, buyers, and vendors can access RES.NET Connect for status updates and deliverables or utilize the site's extensive training resources. M.ALTA.ORG The American Land Title Association (ALTA) rolled out a new mobile website that the organization says meets the needs of title professionals in today's fast-paced, increasingly mobile world. m.ALTA.org provides visitors with on-the-go access to industry news, social networks, and member resources— all from their mobile devices. MARKETVIDEOS.COM For a monthly fee, MarketVideos.com provides clients with four professionally produced marketing videos—customized and branded—that can be posted online or distributed as video newsletters. But until August 1, DS News readers can try out the services for free; just enter the code DSNews. 10 There's a mortgage debt "overhang" that threatens the health of the national economy, and according to a report posted on the Federal Reserve Bank of New York website and authored by Robert Hockett, one possible solution to the problem comes in the form of eminent domain. Of the roughly 11 million underwater mortgages, about 3 or 4 million are in default, foreclosure, or foreclosed on and awaiting liquidation, according to the report, titled "Paying Paul and Robbing No One: An Eminent Domain Solution for Underwater Mortgage Debt." Hockett, a Cornell Law School professor, says these past due mortgages put the economy at risk due to their impact on net worth and spending. As spending lowers, so does employment growth, leading to more foreclosures, he explains. So what should be done to address these problem loans? "The most effective means of averting mortgage delinquency, default, and foreclosure—and the associated economic costs—is principal reduction," Hockett wrote. However, while writedowns held in bank portfolios "occur at significant and still growing rates," securitized mortgage loans are more of a problem due to certain contract provisions, the report explained. For example, many of the pooling and servicing agreements governing such loans require the large majority of security holders to vote before a loan can be modified. "[T]hese bondholders, geographically dispersed and unknown to one another, cannot collectively bargain with borrowers or buyers on workouts or prices," according to Hockett. As such, this problem requires a collective agent in the form of state and municipal governments who can use their power of eminent domain to purchase and restructure underwater mortgages, Hockett says. He further explains in the report that "these governments can step in to purchase underwater loans at fair value, deal directly with the trustees of the private-label securitization trusts, and sidestep the rigidities of the pooling and servicing agreements. They can then reduce the principal on these loans, lowering the 'water' and thereby reducing the risk of default." To finance purchases of these underwater loans, Hockett suggests using monies borrowed from federal agencies or private investors. Mortgage Resolution Partners (MRP) is a community advisory firm that has been actively approaching local governments and proposing the controversial use of eminent domain to purchase underwater mortgages. As part of MRP's proposal, the firm would provide funding for the loan purchases. San Bernardino County and two of its cities, along with other areas, rejected MRP's controversial idea of employing eminent domain to seize underwater mortgages last year due to a lack of support. In addition to his work at Cornell, Hockett serves as consulting counsel to the International Monetary Fund. At one time he also provided consulting services to MRP; his paper "Paying Paul and Robbing No One" was published on MRP's website in November 2012. He was recently a visiting scholar at the Federal Reserve Bank of New York.