July 30, 2013 |
Richmond is adopting a plan to take over underwater mortgages that would invoke the city's eminent domain powers if necessary. The city will be the first in the nation to formally adopt the novel but controversial plan that was rejected by San Bernardino County and two of its cities earlier this year. The city said it will buy home mortgages from financial institutions, write down those loans and refinance homeowners in the properties into new loans. If financial institutions do not cooperate, the city will seize the loans using eminent domain, Richmond Mayor Gayle McLaughlin said.
July 30, 2013 |
Richmond is taking action on its housing crisis, but is the California city going too far in its mission to save homeowners from underwater mortgages? On Tuesday, Richmond sent notices to holders of underwater mortgages asking them to sell their loans to the city or risk having the city use eminent domain to seize residential mortgages. While other cities have considered adopting a plan that would allow them to invoke eminent domain, Richmond appears to be the first city to do so. It's a controversial move in part because “eminent domain is usually used to seize land -- not loans -- to serve the public good, as when local governments seize blighted properties,” explains Times reporter Alejandro Lazo.
August 7, 2013 |
Wall Street firms are directing a lawsuit aimed at blocking the city of Richmond's proposed use of eminent domain to write down mortgage loans for certain residents. Richmond last week became the first city in the country to press forward with the controversial eminent domain mortgage plan, which has come under debate in a variety of municipalities for more than a year. San Francisco firm Mortgage Resolution Partners, which is also named as a defendant in the suit, first marketed the plan last year to San Bernardino County and two of its cities, Fontana and Ontario.
August 16, 2012 |
A plan to seize and restructure troubled mortgages in San Bernardino County using eminent domain has drawn big Wall Street players to the halls of local government once again. The cities of Ontario and Fontana, in partnership with the county, are exploring using private funds to acquire mortgages that are "underwater," in which the homes wouldn't sell for enough money to pay off the loans. Under the Homeownership Protection Program, the loans acquired by government authority would be restructured, lowering the amount owed, with the intent of helping the owner keep the home.
August 8, 2013 |
The nation's top housing finance regulator threatened to choke off mortgage lending in cities that use eminent domain to seize underwater loans from lenders. The salvo from the Federal Housing Finance Agency came Thursday, on the heels of a lawsuit directed by major Wall Street firms and U.S.-sponsored mortgage giants Fannie Mae and Freddie Mac against the Bay Area city of Richmond. Richmond is the first to push forward with the plan, also being debated in cities across the state and nation.
January 10, 1991
After accidentally letting it lapse, the City Council has reinstated its power of eminent domain over a commercial redevelopment area along Alosta Avenue. Under eminent domain, cities may purchase properties without the owners' permission. The city's eminent domain authority over the area expired in 1988 and was not renewed then because "we didn't realize it ran out," City Manager Art Cook said. The renewal, approved Tuesday by the council by a vote of 4 to 0, is good for 12 years.