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HUD Says It’s Unclear If FHA Can Back Loans Issued After Seizure

The U.S. Department of Housing and Urban Development told lawmakers it couldn’t say if the Federal Housing Administration would insure new mortgages in communities including Richmond, California that propose to seize home loans through eminent domain.

“Pending legal developments and possible further execution of the plans in question, HUD does not know whether any new mortgages which might be created would qualify for insurance by the Federal Housing Administration,” Acting Assistant Secretary Elliot Mincberg wrote in an Aug. 12 letter responding to questions from members of Congress.