Realtors and residents debate Richmond’s eminent domain plan
on September 10, 2013
Last Night’s gathering at the Police Activities League was pegged as a “debate” on the pros and cons of the city’s plan to buy or seize 624 underwater mortgages.
But only the opponents’ spokesman showed up. Nevertheless, even though he had the field to himself, Realtor Jeff Wright faced a tough audience.
“It’s not the city’s place to interfere in an agreement between a borrower and a lender,” Wright said. “You can’t blame the banks for having a product and selling it.”
Wright is a representative for the Western Contra Costa Association of Realtors (WCCAR). In recent weeks, the WCCAR has blanketed the city with flyers criticizing the city’s eminent domain plan. The association’s campaign is being funded, in part, by more than $70,000 from the California Association of Realtors and the National Associations of Realtors.
Wright was supposed to face off against Stephen Gluckster, the president of Mortgage Resolution Partners, the investment firm that’s partnered with the city to try and seize underwater mortgages. Gluckster was unable to attend the event. Mayor Gayle McLaughlin was invited to speak, but she declined.
Wright spent much of the evening attacking the city’s plan. “Part of the drive to move forward with this is blight,” said Wright. Proponents of the proposal say that if homes go into foreclosure, it will hurt neighborhoods and cost $25 million in mitigation costs. “As far as I’m concerned though, you can’t make the blight argument [because] just about every property that comes on the market today gets sold.”
Wright added that MRP, and their “Wall Street investors,” stand to profit from the plan, while homeowners will suffer.
Many have accused Wright, and the WCCAR, of spreading misinformation. “There’s a lot of people underwater, and they would love to feel confident that they can keep their homes,” said Marvin Webb, an audience member, and minister at Bethlehem Missionary Baptist Church in Richmond. There are 1,468 private label mortgages in Richmond— meaning they’re bundled and sold to private investors. In 2011, Fannie Mae estimated that half of them would result in foreclosure.
“I’ve been in a position where I was close to losing a home,” said Webb. “This plan is going to free up money so people will be able to pay their taxes, pay more into the community, and just be more involved.”
The Securities Industries and Financial Markets Association said that if Richmond follows through with its plan, it might raise borrowing costs. The Federal Housing Finance Agency has also said that the plan poses a threat to Fannie Mae and Freddie Mac, which may restrict or cease business activities in the area if the city moves forward.
Yesterday, a coalition of fair housing and civil rights groups filed an amicus brief in federal court, alleging that such actions by the securitization industry would amount to redlining, because they would disproportionately affect African Americans and Latinos.
Tonight, the City Council will decide on the next steps for its eminent domain plan. Councilman Tom Butt said, “There are some potential problems with the proposal, and if those problems become insurmountable, the council will do what it needs to do. But I don’t think we’re at that point yet.”
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