Judge rules for Richmond in mortgage lawsuit 

click to enlarge A protestor holds a sign during a demonstration outside of the Wells Fargo headquarters on April 23, 2013 in San Francisco, California. - JUSTIN SULLIVAN/GETTY IMAGES
  • Justin Sullivan/Getty Images
  • A protestor holds a sign during a demonstration outside of the Wells Fargo headquarters on April 23, 2013 in San Francisco, California.

A judge has dismissed a lawsuit over the city of Richmond's plan to use eminent domain to seize underwater mortgages.

U.S. District Court Senior Judge Charles Breyer ruled Monday that the lawsuit was premature because the city had yet to approve the plan.

Wells Fargo & Co., Deutsche Bank AG and The Bank of New York Mellon sued Richmond after city officials began discussing plans to use eminent domain to seize the mortgages and offer them back to homeowners at cheaper rates. The banks want to stop Richmond from seizing the loans.

John Ertman, an attorney for the banks, told the Contra Costa Times that the judge's ruling only postpones the day that Richmond will have to defend the eminent domain plan in court.

Last week, San Francisco Supervisor David Campos suggested that the board could explore a similar program to what Richmond has proposed.

— Staff, wire report

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