Using local eminent domain to deal with foreclosures?

http://www.huffingtonpost.com/2012/09/01/eminent-domain-mortgages_n_1836710.html

"Gluckstern had an interesting idea: Authorities would seize home loans -- crucially, not the properties themselves -- that fit a defined set of characteristics: underwater, held in private trusts and still current, meaning that homeowners were still making monthly mortgage payments. The local government would then forgive all of the debt in excess of what the home was worth and help homeowners refinance at a new, lower value.
The pension and institutional investment funds that actually own these loans would get paid fair market value. Mortgage Resolution Partners would pocket a $4,500 fee per loan for fronting the money to make the purchase. Homeowners would gain a new incentive to invest in repairs and upgrades to their homes, and gain hundreds of dollars each month to spend on the local economy.
The plan could be customized to fit the needs of the local community, Gluckstern said."

I'm not sure what to think of this.  It's a bold plan.  It may be a misuse of eminent domain.  But on the other hand, it may be the only hope many homeowners have for saving their homes.  The federal government quickly bailed out the very banks that caused the problem in the first place, but not much has been done for the homeowner victims of others' greed.  So I look forward to seeing how this pans out.