Politics & Government

Should El Cerrito Buy Mortgages?

Should the City of El Cerrito follow Richmond's lead and buy home mortgages from banks?


Could the City of El Cerrito help residents out of their financial woes by buying home mortgages from banks? It's a controversial plan that has been proposed by city leaders in Richmond.

Richmond Mayor Gayle McLaughlin announced last month that Richmond was
teaming with Mortgage Resolution Partners in a plan to buy more than 600 city
residents' mortgages in order to restructure or modify the loans, giving the
financially struggling homeowners more affordable monthly payments.

The plan is meant to prevent foreclosures in a city where roughly
half of homeowners are underwater on their mortgages, or owe far more than
their home's current value, according to MRP and city officials.

Analysts have said the plan could backfire by making affordable mortgage loans harder to get.

Wells Fargo and Deutsche Bank have filed a lawsuit against the City of Richmond and San Francisco investment firm Mortgages Resolution Partners for their plan to use eminent domain to force the sale of 624 underwater mortgages, declaring the plan unconstitutional.

So, what do you think? Should El Cerrito follow Richmond's lead? Let us know in the comments section below.

— Bay City News contributed to this report


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