North Las Vegas homeowners revisited a plan to salvage underwater mortgages through the city’s power of eminent domain last month, the third time the effort has come before homeowners and members of the City Council in as many months.
The proposal, first presented by San Francisco-based Mortgage Resolution Partners at a City Council meeting in March, would allow the city to seize a bad home loan in much the same way it condemns a blighted property.
Under the plan, city officials would pay mortgage investors less than face value to take on a troubled home loan while representatives from MRP restructure the homeowner’s debts into a new mortgage backed by the Federal Housing Administration.
The company would charge the city a per-loan advisory fee and take a cut on the difference between the original bad mortgage and an FHA-backed mortgage sold at current market value.
A May 29 neighborhood meeting on the topic drew interest from a few area homeowners with questions on the program’s cost and effectiveness, though most aired concerns over its consequences.
“Why can’t you resell (mortgages) to your own team?” asked homeowner Debbie Patton. “A lot of these market brokers you want to work with were part of the problem in the first place.
“So I just want to make sure if this is implemented, it’s going to truly benefit the homeowners, because they’ve been (wronged) so many times.”
Six attendees clutched fliers handed out by political action committees opposed to MRP’s push to restructure an estimated 4,700 underwater North Las Vegas home loans, including one group with ties to the Greater Las Vegas Association of Realtors.
Former City Council member Richard Cherchio, who hosted the meeting, suggested that some fliers handed out in Sun City Aliante — which characterized the move as a “risky, speculative real estate scheme” — aimed to scare residents into opposing an effort many felt they didn’t understand.
“I believe in K.I.S.S.: Keep it simple, stupid,” said licensed real estate agent Lydia Garrett. “I’m in the business, but I couldn’t explain this program to somebody else.”
Representatives from MRP called claims listed in the Sun City fliers “ridiculous,” explaining that homeowners would not lose their homes under the plan, which is due for an up-or-down City Council vote next month.
“Some of our opponents have been spreading falsehoods throughout the community,” said MRP partner Byron Georgiou. “Nothing can happen to any homeowner under this program unless they want something to happen.
“The reality is nobody is doing anything. If you don’t do anything, most of these people are going to lose their homes to foreclosure.”
North Las Vegas City Council members hope to reconvene with officials from MRP and the public for a workshop set to begin at 5 p.m. June 11 on the fifth floor of City Hall, 2250 Las Vegas Blvd. North.
Contact Centennial and North Las Vegas View reporter James DeHaven at firstname.lastname@example.org or 702-477-3839.