RICHMOND (CBS SF) — An unprecedented plan to buy struggling Richmond homeowners’ underwater mortgages is moving forward.
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, allowing homeowners to restructure their mortgages.READ MORE: Lafayette to Consider Making Stop Sign Bird Houses Public Art Over Objections
The council rejected an agenda item submitted by Vice Mayor Corky Booze and Councilman Nathaniel Bates to strike down offers to buy the mortgages.
“Many in our community have been targeted by predatory loans, too many have already lost their homes, and all of the city of Richmond has suffered,” said Mayor Gayle McLaughlin, who authored the council resolution in favor of the plan.
About half of the city’s homeowners are underwater on their mortgages, city manager Bill Lindsay said at the start of Tuesday night’s roughly seven-hour meeting at the Richmond Memorial Auditorium.
In a bid to counter that trend, City Mayor Gayle McLaughlin has led the charge toward a partnership with San Francisco investment firm Mortgage Resolution Partners (MRP) to buy 624 city residents’ mortgages that are underwater, or that owe more money than the home is currently worth.