California City Votes To Pursue Eminent Domain Plan, Legal Challenge Found Not Ripe For Injunction

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On September 11, the California city of Richmond reportedly voted to proceed with a plan to employ its eminent domain authority to seize certain mortgages. As previously described, the city recently demanded that owners and servicers of 626 home mortgages sell the loans to the city or face seizure. The city proposed to then write down the principal of the purchased mortgages and sell the loans to new investors. On September 12, a U.S. District Court hearing challenges to the city’s action declined to enjoin the city’s plan at this time, finding that the issue is not yet ripe for determination. The court did not decide on the city’s pending motion to dismiss, but stated it will rule by September 16 on whether dismissal is appropriate or whether that motion also should be put on hold.

Topics:  Condemnation, Eminent Domain, Foreclosure, Mortgages, Municipalities, Takings, Underwater Homeowners

Published In: Civil Remedies Updates, General Business Updates, Constitutional Law Updates, Finance & Banking Updates, Residential Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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