Mortgage Resolution Partners
A federal judge in San Francisco sided with the City of Richmond in its effort to take over mortgages from hundreds of struggling homeowners by denying a request from banks for a preliminary injunction because it’s too premature to decide.
The Richmond City Council voted 4 to 3 early Wednesday morning to continue pursuing the controversial plan, which could use the city’s power of eminent domain to force bondholders to sell underwater loans.
The mayor of a financially struggling East Bay city and several supporters showed up unannounced Thursday at Wells Fargo Bank’s headquarters to demand it drop a lawsuit fighting a novel plan to refinance hundreds of “underwater” mortgages.
Two banks are suing the city of Richmond over its plan to invoke eminent domain to help struggling homeowners refinance into new mortgages in line with their homes’ current value.
The city is the first in the country to take the step of threatening eminent domain to handle underwater mortgages.