Washington, DC - A new blog post by James Brooks, Program Director with the National League of Cities (NLC), For the Love of Eminent Domain, profiles the City of Richmond, Calif.’s recent decision to work with the private firm Mortgage Resolution Partners to use eminent domain to seize properties occupied by borrowers having mortgages that exceed the current value of the property in an effort to prevent future foreclosures. Brooks notes that this unusual move may be due to the lack of resources the city has available to it. “Everywhere the city looked for timely, serious, and long-term help, no credible partner could be found,” he states.
The post can be found on NLC’s blog: CitieSspeak.org.
The post highlights the lack of federal and state resources available to cities for mortgage foreclosure assistance. The post also laments the fact that funds designed to serve critical housing needs for low- and moderate-income families, such as Community Development Block Grant (CDBG) funds, have been sharply reduced by Congress in recent years.
Excerpts from the blog post include:
“The City of Richmond, California has been abandoned and cast adrift by all those partners who might logically be expected to support local governments facing severe challenges to the local economy and the real estate market. Into the void stepped the private firm Mortgage Resolution Partners (MRP) peddling a grand solution to solve a prolonged and severe disruption in the housing market – use of eminent domain to acquire mortgages with negative equity.”
“Millions of homeowners have been foreclosed upon in the last six years. California cities have borne a disproportionate share of foreclosures. City leaders in Richmond naturally want to help their residents either by using their own resources or acting in concert with other partners (federal, state, nonprofit, etc.). But everywhere the city looked for timely, serious, and long-term help, no credible partner could be found.”
The National League of Cities is dedicated to helping city leaders build better communities. NLC is a resource and advocate for 19,000 cities, towns and villages, representing more than 218 million Americans.