Richmond (Calif.) adopts eminent domain mortgage plan

[Newsjock]

Source: Los Angeles Times

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.

... The city on Tuesday sent notice to the holders of more than 620 underwater mortgages for homes in the city, asking these servicers and trustees to sell the city these loans. The city sent letters to 32 entities. The city plans further such actions in the future, officials said in a conference call with reporters Tuesday.

Read more: http://www.latimes.com/business/money/la-fi-mo-richmond-eminent-domain-20130730,0,7196420.story

[KamaAina]

1. Of note: Mayor McLaughlin is the highest-ranking Green Party elected official in the U.S.

She led a caravan a few miles down San Pablo Avenue to support Occupy Oakland.

Odd that this is in the L.A. Times but nowhere to be seen in Bay Area media.

[juajen]

2. On the surface, this sound like a good plan. Have I missed something?

[BrotherIvan]

3. Something like this should have been done at the federal level

I know plenty of people who wanted to pay their mortgages and stay in their homes, but the banks refused to refinance because they made money both ways. It was criminal and unforgivable. There are two homes on my street which have been empty for two years, boarded up. They had a guard for a year, but I guess they figured it wasn't worth it. Now the neighbors next door are using the dead front yard to grow a gorgeous vegetable garden. At least it's good for something.