Richmond, California, has approved the next phase in its landmark effort to rescue homeowners from underwater mortgages. Earlier this year, Richmond became the first city in the country to offer to purchase mortgages of distressed homeowners from Wall Street banks and other lenders. The city empowered itself to use eminent domain to purchase loans and modify them so that families can stay in their homes. On Wednesday, the City Council voted to form an authority that will oversee the program and aid homeowners facing foreclosure. Richmond can now invoke eminent domain if banks holding securities of more than 620 homes reject city offers to purchase the properties at appraised rates. Wall Street banks including Wells Fargo and Deutsche Bank are seeking to block Richmond’s effort in court.