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September 12, 2013

Richmond, CA Approves Body to Oversee Purchases of Underwater Mortgages 
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Richmond, California, has approved the next phase in its landmark effort
to rescue homeowners from underwater mortgages. Earlier this year,
Richmond became the first city in the country to offer to purchase
mortgages of distressed homeowners from Wall Street banks and other
lenders. The city empowered itself to use eminent domain to purchase
loans and modify them so that families can stay in their homes. On
Wednesday, the City Council voted to form an authority that will oversee
the program and aid homeowners facing foreclosure. Richmond can now
invoke eminent domain if banks holding securities of more than 620 homes
reject city offers to purchase the properties at appraised rates. Wall
Street banks including Wells Fargo and Deutsche Bank are seeking to
block Richmond's effort in court.

 

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