Calif. Mortgage Seizure Plan Faces Uncertain Outcome

Law360, New York (August 12, 2013, 1:17 PM EDT) -- Amidst reports of rising home prices throughout California and fears of a new housing bubble, controversial plans floated by California cities to deal with the lingering effects of the mortgage meltdown by invoking their powers of eminent domain are gaining traction.

The city of Richmond in Northern California has begun implementing the plan by sending letters to hundreds of holders of underwater mortgages — mortgages on homes that are now worth less than the mortgage amount — offering to purchase the loans at a discount. If...
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