On July 30, the city of Richmond, California, became the first city to make a specific offer to purchase underwater mortgage loans pursuant to the 'Municipal Plan' that Cornell Law Professor Robert Hockett has been advocating. More cities are embracing the plan, with the city of Irvington, New Jersey, having resolved in earlier July to move forward while consulting with Hockett, the city of Seattle, Washington, having commissioned an analysis by Hockett of the plan’s potential for that city’s foreclosure problems, and approximately twenty more cities at various stages of the process.
“What is particularly exciting about this,” Hockett observes, “is that all of these cities are acting independently, and that all of them are showing interest in different variations on the plan tailored to their own unique foreclosure crises.” Some cities, for example, are particularly interested in a version of the plan that Hockett is working on with nonprofit organizational funding. Others are interested in a version of the plan that employs government foreclosure-prevention funds. And still others are partnering with one or another of several private service providers with whom Hockett is working who are offering competing variants of the plan’s basic template.
“After years of first quietly, then not so quietly pushing this idea,” Hockett says, “it is very exciting to see that it now is becoming a fully fledged ‘movement.’ The cities and the nation at large might now at long last emerge from their six-year-long debt-deflationary slump, and they have my great colleagues in government and the financial, community advocacy, and legal communities to thank for it.”