The City of Richmond, California has come up with a unique plan. The city sent notices to the institutions holding more than 600 underwater mortgages. The city asked these institutions to sell the mortgages to the city. The city offered to buy the mortgages for 80% of the fair market value of the homes. The City intended on writing down the mortgages for the purpose of helping the homeowners refinance their properties.
Investment Group Brings Lawsuit To Stop The City
An investment group filed a lawsuit in a Federal Court in California. They seek to prevent the City from using Eminent Domain to seize mortgages of local residents who owe more than the value of their property. The investment group claimed “the purpose of the lawsuit is to protect retirees and save them from an unlawful and unconstitutional seizure of private property and to prevent severe damage to the country’s home mortgage market.” The investment group requested the court stop Richmond, California from moving forward with its program and to declare its plan to seize mortgages as being unconstitutional. The City of Richmond claimed the lawsuit is without merit and their plan is appropriate.
Since the case is in its infancy, we’ll see how things work out in the future. However if the city is willing to seize its resident’s underwater mortgages, make a deal with the institutions holding those mortgages to pay them a fair amount for the mortgages and thereafter the homeowner’s refinance their homes for a lesser amount, it looks like a win-win situation for all parties involved.
Foreclosure Defense Lawyer
Elliot S. Schlissel, Esq. is a prominent foreclosure lawyer representing homeowner’s against financial institutions throughout the metropolitan New York area. Elliot and his associates aggressively litigate foreclosure lawsuits and assist their clients in obtaining mortgage modifications.
