One way to judge the virtues of the city of Richmond’s initiative to use eminent domain to help its strapped mortgage borrowers is by the hysterical reaction of the banks and investors holding the mortgage loans.
Wells Fargo & Co. and Bank of New York have sued the East Bay city in federal court to throttle the plan even before its birth. (A court hearing on their request for an injunction is set for Sept. 13.)
They’ve enlisted federal regulators in their hand-wringing over the damage little Richmond (pop. 105,000) might wreak on the mortgage market nationwide. The real estate interests have even cajoled some of their housebroken congressmen, such as John Campbell (R-Irvine), into introducing legislation to stop Richmond in its tracks.