Why Wall Street Is Very, Very Angry at Richmond, California, Right Now

Very early Wednesday morning, the city council in Richmond, California, narrowly voted to move forward with a plan to aid underwater homeowners. It's a plan so controversial that everyone from Wall Street investment banks, to the National Association of Realtors, to U.S. congressmen, to state politicians, to the Federal Housing Finance Agency has weighed in.

Five years into the housing crisis, the city of about 105,000 and its Green Party mayor figure they've run out of better options – and out of patience with federal solutions that never came – to ease the local foreclosure glut. The median price of homes in town has dropped to less than half of what it was at the height of the housing boom. And the city has estimated that about 51 percent of its homeowners are underwater. Richmond is in worse shape than most towns sacked by the housing bubble: Its home values are low, its unemployment and poverty rates are high, and its residents in danger of foreclosure are unlikely to have the principal on their mortgages reduced any time soon.