Richmond Seeks Partners for Plan to Seize Mortgages Using Eminent Domain

January 13, 2014
Modesto Bee (California) 
mortgage lending news

In California, Richmond City Council members have failed to garner the supermajority of votes needed to enact a controversial plan that would use eminent domain to seize underwater mortgages and reduce the amounts borrowers owe.

Now, Richmond Mayor Gayle McLaughlin and council members who support the plan are trying a different tactic. They are hoping to partner with other communities in a joint powers authority (JPA) -- a move that would require only a simple majority of council votes.

The mayor remarked, "The other cities have to take a step forward with us. It takes a certain gumption to do it, but it's so important." Opponents have characterized the new strategy as an end-run around the democratic process. Five votes are needed by the city's seven-member council to use eminent domain on its own. However, a fifth vote in Richmond has failed to materialize. It would take only four votes of the council to join a JPA. The four council members who have indicated they support using eminent domain could appoint themselves to the authority's governing board, which would be populated with like-minded leaders from other cities.







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