What started as a battle between investors has spread to include lenders, borrowers and servicers. Proponents of plans to use eminent domain for principal reduction warn that the government-spon-sored enterprises and lenders could be subject to redlining and other consumer protection regulations for opposing the evolving scheme. No county or municipality has implemented a wide-scale eminent domain plan, though a number of areas are considering the option. Non-agency mortgage-backed security investors have strongly opposed eminent domain proposals, claiming they are unconstitutional, among other issues. “This unprecedented use of eminent domain law, if successful, would...