Richmond Escalates Eminent Domain Plan With Loan Offers

Richmond, California, is planning to buy residential mortgages in low-income areas for as little as 25 cents on the dollar and may force the sales under eminent domain laws, moving forward with a controversial program that would potentially seize home loans from investors.

Richmond, a city of about 106,500 on the east side of San Francisco Bay, sent letters to 32 servicers and trustees with offers to purchase 624 mortgages whose loan balance exceeds the property value, officials said on a conference call. The loans are the first that the city plans to buy or seize under legal powers unless loan servicers agree to sell, Mayor Gayle McLaughlin said.