Richmond Seeking Proactive Solution For Distressed Homeowners
Anyone in the San Francisco Bay Area who thinks that the real estate crises and underwater homes are “so 2012” might consider a trip over to nearby Richmond. Just across the Bay, Richmond city officials have taken a serious step toward actually using the eminent domain tactic to rescue underwater homeowners from their distressed homes.
While homeowners in San Francisco, San Mateo and many other nearby cities enjoy healthy appreciation in their homes, Richmond residents continue to struggle with options to fix their situations.
This week the city of Richmond sent letters to 32 banks and other mortgage holders offering to buy 624 underwater mortgages at discounts to their homes’ current value. If the banks fail to cooperate with the city, then Richmond may use what some cities have threatened in the past, to use their power of eminent domain to condemn the mortgages, and seize them using court determined fair market value.
Them the city would assist homeowners to refinance info the mortgages in line with their current value.
Richmond’s goal is to help stabilize the community by eliminating the numerous distressed homes that remain.
Of course the banks and Wall Street investors don’t think highly of this idea. They claim that the tactic is unconstitutional and if the city does move forward you can bet your mortgage that lawsuits will be flying around the city of Richmond.
Richmond Underwater Homes By The Numbers
624 Loans Richmond has made offers on
444 Loans current on payments
180 Loans delinquent on payments
32 Servicers for those loans
$241.98 million Total face value of those 624 mortgages
$177.16 million Total current market value of the 624 homes
$68.82 million Negative equity in the homes