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City Proposes to use Eminent Domain to Save Underwater Mortgages

The City of Richmond, located in Northern California, has proposed using the power of eminent domain to condemn loans secured against properties where the property is worth less than the loan. This City has started sending letters to hundreds of lenders offering to purchase the loans at a discount. If the lenders refuse, Richmond’s mayor has stated that the City will start seizing the loans based on eminent domain. It is anticipated that the lenders who refuse to transfer the loans, will challenge Richmond’s plan as being unconstitutional. We will continue to post updates regarding the progress of this plan.

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