Friday, September 13, 2013

Richmond Approves Plan to "Seize" Underwater Mortgages

Early Wednesday morning the Richmond City Council (on a 4 to 3 vote) approved a plan to "seize" underwater mortgages using their power of eminent domain and turn them over to an investor. Opponents are concerned the plan will dissuade banks from making loans in Richmond.

Meanwhile, on Thursday a federal judge rejected a suit filed by two banks to stop Richmond from seizing mortgages. This decision allows Richmond and Mortgage Resolution Partners (MRP) to move forward. MRP is a San Francisco-based investment firm that is shopping the mortgage seizure plan to cities throughout California.

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