The 13.000-member, $103 million Cooperative Center Federal Credit Union expressed support Sept. 24 for Richmond, Calif., to obtain and restructure some mortgages even if the Bay Area town has to use eminent domain.
In a statement, the Berkeley, Calif.-based credit union said the goals of the program outweighed its risks.
“We believe that modifying heavily underwater mortgages to keep residents in their homes, instead of foreclosing and kicking them out, has a tremendous benefit to the community, Cooperative Center said.
The credit union also said in the whether the principal reduction modifications are achieved through a straight purchase or eminent domain of the loans at market value, it would continue lending to its Richmond-based members. Big banks said they would refuse to make mortgages in Richmond if the plan moves forward, Cooperative Center said.
The city’s council and mayor have approved the plan, but it remains in limbo due to California law governing split votes and the opposition of banks and other lenders and regulators.