North Las Vegas says no to eminent domain bid
Sept. 6, 2013 – The city council for North Las Vegas, Nev., voted 5-0 to reject a plan to allow San Francisco-based Mortgage Resolution Partners to purchase at-risk home mortgage loans held by banks and mortgage security investors, the Las Vegas Review-Journal reported.
MRP is the same company that is working with the city of Richmond, Calif., on a similar plan.
The report said MRP would have received a fee of $4,500 per transaction in the Las Vegas scheme. According to the report, the city would pay less than face value to purchase the loans and sell them back to homeowners, who would also end up with lower monthly mortgage payments. It said if the holder of the loan rejected an MRP-backed opening bid on the loan, the city would seize it and pay the bank based on the property’s current market value, leaving the bank to write off the difference.
MRP is working with Richmond, Calif., on a plan to refinance underwater loans through the Federal Housing Administration, an effort that NAFCU and others are strenuously opposing. NAFCU has pointed out that this kind of activity could lead to a tightening of credit and impede the housing recovery.
The Federal Housing Finance Agency has said it would take measures to thwart any such effort to rope Fannie Mae or Freddie Mac into such a plan.
Las Vegas Review-Journal article
"Eminent domain fight brews in California," 8/19