Seize the loans of belly-up homes

``The plan employs the city's power of eminent domain, just as federal agencies employed federal eminent domain. Using this power, the city purchases underwater mortgages out of the latter-day Rube Goldberg trusts -- now known as "private label securitized," or "PLS" trusts -- in which they are locked. The city then writes the loans down much as FHA did, thereby rescuing homeowners, its own ravaged communities, its tax base and even the trust investors -- who, like bankers back in the '30s, can't do the write-downs themselves. The plan is necessary because the state of the city's housing market -- especially for its African-American and Latino communities -- remains dire.''