Richmond forging ahead with mortgages plan


In Richmond, neighborhood signs tell an ongoing, foreboding story of foreclosures. Roughly half the homes in the city are worth less than their owners paid for them.

"By the time it's the last week of the month, we're stretched," said Richmond homeowner Patricia Castillo. Castillo and her husband paid $425,000 for their home eight years ago. Now it has lost more than half its value, but she has hope. She said, "If the banks, Wall Street got bailed out, how come we don't get bailed out?"

After months of discussion, the Richmond City Council voted Tuesday night to move ahead with possibly using eminent domain to buy underwater mortgages en mass and with an investment group called 'mortgage Resolution Partners' force banks to renegotiate.

Richmond City Councilmember Jael Myrick voted in favor. He told us, "I think we sent letters to the different financial institutions and the different investors for each of these homes that are on the list and we've asked them to come back to us and, you know, if they don't like our offer, give us a counter offer, work with us."

But he and the mayor face opposition on the council. Vice Mayor Corky Booze worries about lawsuits and reprisals from banks. He told us, "What it does is it lowers the value of the properties in the city of Richmond because the lending institutions will not lend where you have taken and used eminent domain."

Councilman Nat Bates is concerned that while the move is supposed to prevent blight in neighborhoods, the city's investing partner has primarily targeted nicer homes.

"They're cherry picking. That's what they do. They cherry pick, they pick out those where obviously they can make the greatest degree of profit," said Bates.

It is worth noting that Bates is underwater in his mortgage, but he does not want help.

The same cannot be said for Castillo, who signed up for eminent domain, if it ever happens. Anything, she said, to keep alive her dream of home ownership. She told us, "We would rather eat beans and rice and tortillas to have our home, here."

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