One City's Drastic Idea To Deal With Foreclosures

Richmond, CA is ready to take drastic action in order to stop foreclosures. Here is the explanation from cnnmoney:

"The California city of Richmond said Tuesday that it's ready to take an extraordinary step in its bid to stop foreclosures -- threatening to wrest mortgages from the investors who now control them. As a first step, the San Francisco Bay city said it will work with an investment firm to try to purchase mortgages of underwater homeowners at a price well below their current balances. It would then try to get those loans restructured to make them affordable.

But if the holders of the loans, who are mostly investors, refuse to sell by Aug. 14, the city said it will invoke eminent domain to seize the mortgages so it has more control over the process of making them affordable. Eminent domain is the legal principle that lets government entities purchase land or structures, usually from reluctant owners who don't want to sell. It is typically invoked for public uses such as parks, roads or utilities -- not mortgages. In the case of Richmond, the city argues that eminent domain is in the public interest because it could let people stay in their homes and help keep neighborhoods, especially minority communities and low-income neighborhoods, from fraying."

What do you think about that? The average home price in 2006 in Richmond was around 400,000 and today it is half that. It will be interesting to see if this program works out. Would your area benefit from something like this? Our state capitol, just 45 minutes from us here in West Lampeter township,  is overrun with boarded up and abandoned houses and could use some kind of innovative thinking like this.