The City of Richmond was hit hard when the housing bubble burst – about 12,000 homeowners there are underwater. That’s roughly half of all mortgage holders in the city. Richmond’s City Council recently approved a radical new plan to use eminent domain to buy underwater mortgages and resell them to beleaguered homeowners at lower prices. Richmond mayor Gayle McLaughlin spoke with KALW's Holly Kernan about her city’s radical plan to help homeowners drowning in debt.
GAYLE MCLAUGHLIN: Simply put, this is the city buying mortgages that are likely to end up in foreclosure and negotiating new mortgages so that homeowners can afford them and stay in their homes.
HOLLY KERNAN: And you're hoping that Richmond may start a movement.
MCLAUGHLIN: Absolutely, a national movement is what is needed. The lenders, the banks, the greed that started this problem, cannot fix this problem. They do not have a solution. I've met with some of these servicers who are representing the banks and they have clearly not been able to even articulate a solution, much less implement one. So we in Richmond are showing that we are willing to provide a solution and we think it is taking off nationally and needs to continue to do so.
Click the audio player above to hear the complete interview.
Do you have an underwater mortgage? How did you handle it? What do you think about Richmond’s plan? Let us know at 415.264.7106. Or join the discussion on facebook.