I have become increasingly fascinated by this new way cities are using to get their citizens out of under water mortgages so they can stay in their houses.
Working with companies that aren’t really companies but are calling themselves community advisory firms. Look at this one: http://mortgageresolution.com/
This is a good blog about this topic as well: http://www.nationaleminentdomain.com/articles/national-eminent-domain/
The process free’s up states to bypass constitutional road blocks by having advisory firms such as MRP to construct a “legal” way to use eminent domain to slurp up several hundred under water mortgages at a time and then get a fee paid to them for each mortgage by the government.
What would happen is that the city would get a nice chunk of the money, the home owner would get around $10,000 in equity in their home so they are no longer under water on their mortgage and a company like MRP would get a set fee per mortgage for their legal efforts.
The problem is that this dismantles the natural trust people have in the free market system because now everyone is under the impression that the state might become Santa Claus and enable further bad behavior.
Eventually this type of thing helps to completely bring down an economy.