| NEW YORK
NEW YORK May 16 Pacific Investment Management
Co, BlackRock Inc and DoubleLine Capital LP and other investors
on Friday withdrew appeals of a ruling that had dismissed their
lawsuits to block a California city's plan to seize mortgages
and keep delinquent borrowers in their homes.
In a filing in the U.S. Court of Appeals in San Francisco,
lawyers for mortgage-bond trustees moved to end appeals in two
The move was made because the plan, based on a legal process
called eminent domain to seize private property for a public
purpose, had not materialized, said John Ertman, partner at law
firm Ropes & Gray, which representing mortgage trustees Wells
Fargo and Deutsche Bank.
But the lawsuit would be "immediately re-filed" if the city
of Richmond, California, took steps toward adopting the plan, he
The trustees sued Richmond last year over the plan aimed at
keeping local residents who owed more than their properties were
worth in their homes.
The other trustees are Bank of New York Mellon, U.S. Bank,
and Wilmington Trust.
U.S. District Judge Charles Breyer ruled last September that
the original case was premature, and that ruling was appealed
roughly a month later. Friday's withdrawal was filed in the U.S.
Court of Appeals for the Ninth Circuit in San Francisco.
"We continue to believe that using eminent domain to seize
mortgage loans is unconstitutional, and harmful to homeowners
and ordinary savers with a pension, 401(k) or IRA," Ertman said.
He said the trustees were dismissing the appeal since
Richmond had not progressed toward seizing loans since Judge
Breyer's ruling and the filing of their appeal seven months ago.
San Francisco-based private investment firm Mortgage
Resolution Partners (MRP) crafted the eminent domain plan for
Richmond. The investor group had said that if the city of
Richmond was allowed to go ahead with its plan, it may result in
steeper down payment requirements and higher interest rates.
(Reporting by Sam Forgione; Editing by Andrew Hay)