September 2013

City of Richmond Moves Forward With Eminent Domain Plan For Underwater Mortgages

On September 11, 2013, the Richmond City Council voted 4-3 to move forward with a controversial plan to aid underwater homeowners by purchasing their mortgages at their current market value and reselling them to homeowners at reduced prices and mortgage payments through the power of eminent domain.  Richmond is the first city to pursue this strategy (San Bernardino considered using it and decided not to).   Richmond recently voted to make offers to buy underwater mortgages, if lenders refuse, the city will take them by eminent domain and worked with a group of friendly investors (Mortage Resolution Partners, or MRP) to refinance the loans with the Federal Housing Administration.