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Can Eminent Domain Save North Las Vegas Homeowners?
Can Eminent Domain Save North Las Vegas Homeowners?

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AIR DATE: June 18, 2013

GUESTS

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.

 

 

 

 

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    COMMENTS:
    What business is it of government if people are underwater on their mortgages? Houses always have and always will go up and down in price, and people always have and always will make both good and bad investments. Perhaps mother government (using taxpayers' money, of course) should guarantee the future value of every investment that everyone makes?!? This whole thing is ridiculous... just let the market clear at whatever price it will clear at; any economist worth their salt would tell us that *that* would be by far the most efficient and fair way to deal with this issue. Remember, eminent domain was called "the despotic power" by our Founders because they knew it would always be abused to the maximum extent possible; based on this current discussion, they were 100% right!
    Tom HurstJun 17, 2013 14:47:12 PM
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