The battle over Richmond’s proposed use of eminent domain to help homeowners avoid foreclosure will reach a crucial point at tonight’s city council meeting, when councilmembers will vote on whether to move forward with efforts to purchase properties with underwater mortgages and then reduce principal payments — or abandon the groundbreaking program completely.
Since late July, when the city made national headlines for sending letters offering to buy more than six hundred underwater mortgages in the city from banks, obstacles have arisen in the form of Wells Fargo and Deutsche Bank filing a lawsuit against the City of Richmond and local realtors hiring a public relations firm to initiate an opposition campaign.
Richmond’s program stems from a partnership between the city and Mortgage Resolution Partners, a San Francisco-based investment firm, which would front the money for purchasing the properties.
The banks that sued argue that moving forward with eminent domain would be unconstitutional and claim the plan is merely a scheme by the firm to reap profit from homeowners. Although Richmond Mayor Gayle McLaughlin has vocally advocated on behalf of the city’s partnership, other council members such as Nat Bates may seek to end it at tonight’s meeting.
Richmond’s anti-foreclosure plan has garnered support from national fair housing groups, the Service Employees International Union, and San Francisco Supervisor David Campos, who announced Monday he would present a resolution to the Board of Supervisors in support of the plan and with intent to explore similar options for San Francisco.