PHOTOS: Cities where wages have fallen farthest “It’s Richmond two and Wall Street zero this week,” said Amy Schur, campaign director for advocacy groups backing the principal-reduction plan. “Judge Charles Breyer confirmed what people in Richmond have been saying all along,” Schur said. “It’s a no-brainer that Wells Fargo’s case against the city of Richmond does not have standing.” Wells Fargo Bank and Deutsche Bank, acting as trustees for mortgage bonds sold during the housing boom, had sued on behalf of the giant bond-trading firms BlackRock Inc., Pacific Investment Management Co. and DoubleLine Capital. The bond firms have invested money, mainly from institutional investors such as pension funds, in securities backed by some of the mortgages in question. They contend that Richmond and its advisory firm, Mortgage Resolution Partners, are offering far less than market value for 624 targeted mortgages, most of which are not in arrears and some of which allegedly are not underwater. The city denies the allegations, saying its valuation of the mortgages and home values was produced by highly respected real estate analysts. The banks had asked Breyer to halt the program while the merits of the suit can be determined. But the said he would not consider doing so until the threat of seizure was “imminent.” The Securities Industry and Financial Markets Assn. noted that Breyer had said nothing about the industry’s claims that using eminent domain to seize mortgages is unconstitutional and “would represent a flagrant misuse of a municipality’s power.” “We fully expect the litigation will succeed on merit once the issue is ripe,” the trade group said. Richmond Mayor Gayle McLaughlin said the city was pursuing its “step-by-step” process because “the banks and the federal government have not provided a fix.” “I was quite pleased that Judge Breyer made statements about the democratic process and how city governments have their processes to go through, including public hearings,” McLaughlin said. “And that all takes time.”]]>
