Wells Fargo Bank v. City of Richmond

Case Updates

The case was dismissed for lack of subject matter jurisdiction.

In its amicus brief, the Chamber urged the District Court to grant the Plaintiff's motion for preliminary injunction. The Chamber argued in its amicus brief that the City of Richmond's plan to partner with Mortgage Resolution Partners (MRP) - a for-profit entity - and use the local government's eminent domain power to seize selected mortgage backed loans should be barred by the court. The Chamber pointed out that while cities are facing significant challenges with the fallout of the housing market and economic downturn, the extraordinary abuse of a city's eminent domain power to seize loans that are actually being repaid is not the answer. The Chamber noted that though MRP touts its plan as a means to avoid foreclosure and blight, MRP's plan does not target loans that are in default, but rather target performing loans that do not have a high likelihood of foreclosure. However, for valuing purposes, MRP treats those exact same loans as if they were already in foreclosure. This kind of cherry-picking program represents a clear threat to the operation of the residential mortgage-backed securities market and risks reducing access to credit for mortgage borrowers.