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So Mayor Gale McLaughlin decided to team up with Mortgage Resolution Partners and use the powers of eminent domain to force banks to reduce the outstanding principal on some of these underwater mortgages. One problem with this plan, Nic Retsinas, Senior Lecturer at Harvard Business School and former Assistant Secretary for Housing at the Department of Housing and Urban Development, points out, is that "it helps the wrong people." Mortgage Resolution Partners wants to reduce the principal on the mortgages of those people who are up to date on their mortgage payments. While we might admire these people for continuing to meet their obligations, cherry-picking 624 families with the greatest financial capability hurts bond holders without really solving Richmond's problem.
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Under the plan the bank will stop full-service wealth management for thousands of customers with between 100,000 and 500,000 pounds to invest. They will be served by a "lighter touch" new segment called "Private Clients".
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