LOS ANGELES -- Richmond, Calif.’s plan to keep homeowners out of foreclosure by seizing underwater mortgages through eminent domain is unlikely to be successfully implemented, according to Moody’s Investors Service.

The San Francisco-area city, with a population of about 100,000, announced the adoption of its controversial plan on July 30. Under the plan, Richmond would invoke the power to take private property for public use to seize underwater mortgages — loans that have a higher balance than the value of the home — held by private-label residential mortgage backed security trusts, for significantly discounted prices.

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