I do not think they are considering taking "ownership of the underwater properties."  Rather, I think that they are planning on taking "the mortgage" through eminent domain.  I do not think that passes Constitutional muster.  It probably violates the Contracts Clause and encroaches on the federal court's Bankruptcy territory.  Further, I do not believe that there is any "public use," which would violate the Fifth Amendment.

While I find it noble that they are attempting to address a serious problem, created largely by the banks, this seems to go too far.  Nevertheless, I do hope that this issue gets some much needed attention.