Lawsuit over CA city’s mortgage scheme premature

SAN FRANCISCO (AP) — Two banks may have prematurely filed a lawsuit to stop a Northern California city from using eminent domain to seize mortgages from the lenders and pay them less than their full value.

The Contra Costa County Times reported Thursday (http://tinyurl.com/kq2deb2 ) that the judge in the case is concerned that the city of Richmond has not yet attempted to seize any mortgages.

Wells Fargo & Co. and Deutsche Bank AG filed the lawsuit after city officials began discussing plans to use eminent domain to seize the mortgages and offer them back to homeowners at cheaper rates. The banks want to stop Richmond from seizing the loans.

But the judge says it appears the banks don’t have a case until Richmond actually authorizes the seizures. The judge says he will rule Monday.

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