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Amir Sufi

Seizures May Be Cities’ Last Hope in Mortgage Crisis

The failure to address crippling household-debt burdens is leading local governments to embrace the radical idea of using eminent domain to seize and write down mortgages.

Over the past month, two cities in California -- Stockton and -- have made moves to file for bankruptcy. They have a combined population of about 500,000, and Stockton is the largest city in U.S. history to file for bankruptcy.