Economic Report - How a California City Wants to Rescue Struggling Homeowners

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American housing market is growing stronger. Yet many areas are still from the collapse of the market in 2008. Richmond is a city California. More than half of the homeowners there owe more their home loans than the properties are currently worth. Such loans risky for lenders since people in that situation often stop making . Now, city officials are moving forward with a plan to rescue struggling homeowners. The city wants to buy the mortgages from banks an amount equal to the current value of the properties. It to work with an investment company to help each homeowner get new mortgage through government programs and private investors. City officials say banks do not cooperate, they will force the lenders to sell loans. Richmond plans to use the legal power called eminent domain. allows officials to take a property but requires the government to fair market value. State and local governments use this legal power take property needed for public purposes, such as new roads, schools economic development. At least two banks are asking a federal court intervene. They want the court to prevent the city of Richmond using eminent domain. Lawyers for the banks say investors such as would lose money. They also say the action would interfere with contracts with investors. The United States paid billions of dollars to banks during the world financial crisis. Now, the courts must decide Richmond, California, can help rescue homeowners through the power of eminent . For VOA Learning English, I'm Laurel Bowman.

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