City councils on each end of the U.S. have responded to the foreclosure crisis by demonstrating an interest in controversial proposals to use eminent domain to seize underwater mortgages, refinance them into FHA loans at fair market value, and then sell them off to other investors. The Salinas (CA) City Council has gone the furthest of the two jurisdictions, choosing Mortgage Resolution Partners earlier this month to develop such a program for the benefit of the homeowners in its jurisdiction. At its Oct. 16, 2012, meeting, the council’s housing subcommittee directed staff to develop and circulate a request for proposals to determine the magnitude of the local residential foreclosure crisis and possible solutions. On Nov. 1, 2012, the RFP was circulated...