What is the Richmond CARES program?
The program is Community Action to Restore Equity and Stability (CARES). Richmond seeks to restore economic and social stability to our community by reducing loan principal, and keeping families in their homes.
Why is the city of Richmond pursuing this program?
The underwater mortgage crisis has devastated our City, and it will continue to do so if we do nothing. The federal government did not purchase these loans and fix them as it promised when it bailed out the banks. The mortgage industry has not provided broad scale principal reduction. So Richmond must take local, community action to protect itself and its residents.
Do you expect to do this with all underwater loans in Richmond?
The CARES program is currently limited to particularly toxic underwater PLS loans made during the real estate bubble and held by private owners. We hope that demonstrating success with this group of loans will encourage banks and the federal government to offer principal reduction to many other underwater local loans.
I am a homeowner in Richmond. Am I eligible for the program?
The City is not currently identifying all the homeowners whose loans may be eligible for the program because the process of acquiring the loans from their owners is ongoing. We expect to provide more information on eligibility in the future. To find out if your loan is among the first group of loans that we hope to acquire, please refer to the next FAQ.
How can I find out if an offer to purchase my mortgage has been made (that is, if my mortgage is one of the 624)?
There are several ways for you to find out if the City has made an offer to purchase your mortgage. You can submit your request through this website by clicking here, or you can send an email with the request to: Richmondsaveshomes.com. You will need to provide your name and address. You can also call the City of Richmond at 510-621-1782. To protect your privacy, a letter will be sent to you at your address. You will be informed as to whether or not an offer has been made for your mortgage.
Will eminent domain be used to purchase these loans if the banks that manage them refuse to sell them?
If the banks are unwilling to sell us the loans, then eminent domain will be considered. Eminent domain authority permits CARES to purchase these loans, paying the current PLS owners the fair market value of the loans as determined by a local jury.
Isn’t this sure to end up in court?
It does not have to. Every one of the banks has the authority to settle potential eminent domain actions by allowing us to voluntarily purchase the PLS loans. For us, it is a matter of community stability and survival. We are confident that this program is legal. If we do end up in court, our private partners will be covering the costs – not the City of Richmond.
Can't the City and the banks just agree on another way to reduce principal and help us stay in our homes?
We would be happy to. Unfortunately, to date the banks have failed to implement broad scale principal reduction, even though it would help them as much as us. We invite them to sit down with us and agree on a practical, citywide program to reduce principal, keep our residents in their homes, and stabilize our community. But we will not delay or weaken our efforts while we wait for them. This crisis has gone on too long and is causing us too much harm to wait any longer.
Will I have to pay income taxes if I participate?
There are both temporary and permanent income tax exclusions that may apply if you receive a principal reduction under the CARES program. The City of Richmond does not give tax advice, but expert housing counselors will be available to answer any questions, including tax questions that participants may have.
Have any other cities implemented the program?
Not yet. However, there are many other cities at various stages of considering this strategy. For example, there are elected officials and organizations in Seattle and Newark that are looking at such a local principal reduction program, and the town council of Irvington, New Jersey recently resolved that eminent domain must be used to reduce principal on home loans. We hope that Richmond will be a leader in creating a nationwide movement of cities implementing the CARES program to save themselves and their communities.
What is the program timeline?
The City has asked the banks to respond to the purchase offer by August 13th. If they do not accept the offer by then, the City will consider its other alternatives.
What can I do to help the program?
You can show your support by writing to the major banks and to your local, state and federal elected officials demanding that the banks accept the offers and that government officials use their greatest possible efforts to ensure that the CARES program succeeds.