Rep. Ellison Statement On The Lawsuit Filed Against The City Of Richmond, CA

Statement

Rep. Keith Ellison (D-MN) released the following statement today after bond holders took legal action against the city of Richmond, CA. The city is seeking to write down mortgages by seizing properties through eminent domain. The Federal Housing Finance Agency has expressed support for additional legal action related to the use of eminent domain to assist troubled homeowners.

"The action taken by bond holders aims to prevent the city from employing its legal power of eminent domain to assist struggling homeowners. According to published reports, the suit is supported by Fannie Mae and Freddie Mac, at the direction of the Federal Housing Finance Agency (FHFA). Once again opposition to principal reduction by those running the FHFA trumps policies that would help homeowners, communities and the economy.

"Principal reduction helps homeowners who owe more than their homes are worth and saves taxpayers money, but the FHFA has refused to reduce the principal on a single loan owned by Fannie Mae and Freddie Mac.

"FHFA's decision to support the lawsuit against Richmond hurts struggling homeowners in the a city overwhelmed by high levels of delinquencies and foreclosures.

"The FHFA should stop threats of additional litigation, assure that they will not discriminate on the basis of credit to any mortgage modified by eminent domain, and implement a principal reduction pilot program.

"Homeowners need a housing policy that helps them stay in their homes and cuts their inflated mortgage payments. The leaders of Richmond, CA are pursuing a solution that will help their city's homeowners and they should be commended for it, not sued."

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