Steven Gluckstern, who’s spent more than a year pushing local governments to seize mortgages from bond trusts to cut balances and help homeowners, is renewing the effort with backing from cities in California and Nevada, Bloomberg News reported today. Gluckstern’s Mortgage Resolution Partners LLC recently sent letters to securities trustees and loan servicers asking them to verify their roles in specific deals and provide information about individual mortgages that could be purchased, he said. The firm must try to negotiate to buy the loans before municipalities can use powers known as eminent domain to force the sales, he said. They would then lower the principal owed. The moves signal a renewed battle over the initiative, which has drawn opposition from bondholders such as Pacific Investment Management Co. and DoubleLine Capital LP and at least 18 trade groups representing the finance industry, homebuilders and real-estate firms. After considering the idea last year, municipalities including San Bernardino County, Calif. and Chicago shelved it even as the housing recovery was failing to help many homeowners escape oversized debt burdens.
