Bank of New York Mellon Corp. Sues to Block City of Richmond’s Condemnation of Home Loans

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The Bank of New York Mellon Corporation (BNY) is seeking an injunction to prevent the City of Richmond, California from using eminent domain powers to seize and refinance more than 600 home loans with outstanding balances greater than the value of the homes securing the loans.

The City of Richmond threatened to take such action in a letter sent to BNY indicating that should the parties be unable to reach a negotiated agreement, the City would consider using its eminent domain powers to condemn the loans. The City has argued that BNY should not be able to secure an injunction because the claim depends on “future events that may never occur.”

The City is seeking to take control of the mortgages from BNY in order to refinance the loans, and provide the homeowners with equity. The City believes such an approach will prevent foreclosures and resulting blight in the area. BNY argues that the City’s plan will harm investors in the loans, many of which it asserts are still preforming, and disrupt the housing market if other localities take similar action.

In September, U.S. District Judge Charles Breyer dismissed a similar suit brought by Wells Fargo Bank NA, finding the suit to be premature. The parties appeared before Judge Breyer on November 1st. The case is Bank of New York Mellon v. City of Richmond et al., case number 3:13-cv-03664, in the U.S. District Court for the Northern District of California.

- See more at: http://www.goodwinsustainabledevelopment.com/blog/brandt/bank-of-new-york-mellon-corp-sues-to-block-city-of-richmonds-condemnation-of-home-loans#sthash.dsOwL6Eh.dpuf

The Bank of New York Mellon Corporation (BNY) is seeking an injunction to prevent the City of Richmond, California from using eminent domain powers to seize and refinance more than 600 home loans with outstanding balances greater than the value of the homes securing the loans.

The City of Richmond threatened to take such action in a letter sent to BNY indicating that should the parties be unable to reach a negotiated agreement, the City would consider using its eminent domain powers to condemn the loans. The City has argued that BNY should not be able to secure an injunction because the claim depends on “future events that may never occur.”

The City is seeking to take control of the mortgages from BNY in order to refinance the loans, and provide the homeowners with equity. The City believes such an approach will prevent foreclosures and resulting blight in the area. BNY argues that the City’s plan will harm investors in the loans, many of which it asserts are still preforming, and disrupt the housing market if other localities take similar action.

In September, U.S. District Judge Charles Breyer dismissed a similar suit brought by Wells Fargo Bank NA, finding the suit to be premature. The parties appeared before Judge Breyer on November 1st. The case is Bank of New York Mellon v. City of Richmond et al., case number 3:13-cv-03664, in the U.S. District Court for the Northern District of California.

- See more at: http://www.goodwinsustainabledevelopment.com/blog/brandt/bank-of-new-york-mellon-corp-sues-to-block-city-of-richmonds-condemnation-of-home-loans#sthash.dsOwL6Eh.dpuf

The Bank of New York Mellon Corporation (BNY) is seeking an injunction to prevent the City of Richmond, California from using eminent domain powers to seize and refinance more than 600 home loans with outstanding balances greater than the value of the homes securing the loans.

The City of Richmond threatened to take such action in a letter sent to BNY indicating that should the parties be unable to reach a negotiated agreement, the City would consider using its eminent domain powers to condemn the loans. The City has argued that BNY should not be able to secure an injunction because the claim depends on “future events that may never occur.”

The City is seeking to take control of the mortgages from BNY in order to refinance the loans, and provide the homeowners with equity. The City believes such an approach will prevent foreclosures and resulting blight in the area. BNY argues that the City’s plan will harm investors in the loans, many of which it asserts are still preforming, and disrupt the housing market if other localities take similar action.

In September, U.S. District Judge Charles Breyer dismissed a similar suit brought by Wells Fargo Bank NA, finding the suit to be premature. The parties appeared before Judge Breyer on November 1st. The case is Bank of New York Mellon v. City of Richmond et al., case number 3:13-cv-03664, in the U.S. District Court for the Northern District of California.