While municipal efforts to use eminent domain to seize homeowners' underwater mortgages have subsided, the issue is still a concern for many mortgage bond market participants, according to executives at the Securities Industry and Financial Markets Association.

With some proposals still outstanding and the prospects that other, currently stalled plans might start up again, the concern is that mortgage eminent-domain attempts could spread more widely if any one municipality is able to make inroads with a proposal, said Chris Killian, managing director and head of SIFMA's Securitization Group.

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