Byron Georgiou, Director, Mortgage Resolution Partners
Sean Fellows, Director of Government Affairs, Greater Las Vegas Association of Realtors
BY MARIE ANDRUSEWICZ -- It’s a new option for the estimated 75 percent of North Las Vegas homeowners dealing with underwater mortgages, but Las Vegas realtors aren’t enthused. San Francisco-based Mortgage Resolution Partners has capital that would allow the city to seize a bad home loan by eminent domain*, in the same way that the city would acquire a blighted property.
The MRP plan has already been adopted by five California municipalities. MRP representatives would put up private capital to back the venture but wouldn’t be able to guarantee the purchase or resale of the original loan to a third party.
“MRP will rip away someone’s note by eminent domain, but they are absolutely not able to guarantee that that homeowner can get a new mortgage, and if you can’t get a new mortgage, you lose the home,” says Sean Fellows, Director of Government Affairs, Greater Las Vegas Association of Realtors. “You can’t separate the body and the soul.”
But Byron Georgiou of Mortgage Resolution Partners says the program, which would be designed and administered by the city of North Las Vegas, won’t harm the housing market.
“The market is stalled right now, because so many people have a $300,000 mortgage on a $200,000 home, and can’t afford to sell. This will stabilize the market, enable people to sell their homes, to upsize, to downsize, and to move forward,” says Georgiou. “This would reduce peoples payments in some instances from $1800 to $1000 a month, money that will be spent in the community ... this program will help the market, not hurt it.”
The Las Vegas City Council will vote on the proposal Wednesday night.
*An earlier version of the story said MRP would seize the property by eminent domain.