[Occupymendocino] Fw: emient domain for the people

[Liz Helenchild]

Published on Wednesday, August 7, 2013 by Common Dreams 
'Eminent Domain for the People' Leaves Wall Street Furious
Housing justice advocates hopeful about  innovative Richmond plan to use public seizure laws to save underwater  homes from foreclosure
- Sarah Lazare, staff writer
Underwater Homeowners Press Conference in front of Richmond City Hall (Photo: ACCE)Using  the authority of state government to actually help people has Wall  Street bankers in a panic, spurring threats of aggressive legal  retaliation against the town of Richmond, California simply for trying  to help some of its struggling homeowners.
'Eminent domain' has  long been a dirty term for housing justice advocates who have seen  municipalities invoke public seizure laws to displace residents and  communities to make way for highways, shopping malls, and other big  dollar projects.
But in Richmond, city officials are using eminent domain to force big  banks to stop foreclosing on people's homes in an innovative new  strategy known as 'Principle Reduction' aimed at addressing California's  burgeoning housing crisis.
Richmond became the first California city last week to move forward on a plan that has been floated by other  California municipalities to ask big bank lenders to sell underwater  mortgage loans at a discount to the city (if the owner consents), and  seize those homes through eminent domain if the banks refuse. The city  has committed to refinancing these homes for owners at their current  value, not what is owed.
City officials launched this process by sending letters in late July to 32 banks and other mortgage owners offering to buy 624  underwater mortgages at the price the homes are worth, not what the  owners owe.
"After years of waiting on the banks to offer up a more comprehensive  fix or the federal government, we're stepping into the void to make it  happen ourselves," Mayor Gayle McLaughlin said in late July.
Wall Street is furious at the plan and has vowed to sue the  municipality, a threat that did not stop Richmond but did slow other  California cities in adopting the strategy.
Big banks have been slammed for their damaging mortgage loan policies  that target poor and working class people and communities of color with  high risk loans, policies that have had a profound impact on Richmond,  which has large latino, African American, and low-income communities.
Eminent domain laws also have a painful history in Richmond, but  housing justice advocates are hopeful about this new twist on the  seizure law.
"For years we have seen cases where eminent domain was used in a  harmful way, and it really hurts low-income communities of color," David  Sharples, local director for Contra Costa Alliance of Californians for Community Empowerment, told Common Dreams.  "People here in Richmond talk about when they built the big 580  Freeway, and people had their houses taken and were displaced."
"But we see this as a way eminent domain is finally being used to  help keep families in their homes," he added. "It is finally a way for  it to be used in a good way."
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