Richmond's Program to Prevent Foreclosures Spreads

November 6, 2013
Richmond Confidential (CA) 
mortgage lending news

A controversial plan to fend off foreclosures in Richmond, Calif., has piqued the interest of municipal officials in Oakland and other markets across the state. And, according to Richmond Mayor Gayle McLaughlin, as many as 18 cities nationwide -- including Seattle, Baltimore, and New York -- are exploring similar "eminent domain" strategies for combating foreclosures.

The growing backing within the state, however, is critical for Richmond, which has faced litigation over its plan. "These are big companies. They have a lot of power, they have a lot of money," concedes Richmond councilwoman Jovanka Beckles. "None of us individual cities can do it alone, but now we're seeing that if we band together we can actually succeed." El Monte and three other Southern California jurisdictions, for example, have approached Richmond about creating a Joint Powers Authority that would allow the separate local governments to act as one in court. "With the support of other cities we can really provide that leverage to get the banks to come to the table and sell us the loans at fair market value," says McLaughlin. "I'm thinking this is now gaining the momentum that we need in terms of creating a national movement."

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