NLV Votes to Move Forward with Underwater Home Plan | Housing
The North Las Vegas City Council voted to move forward with a controversial plan to help homeowners whose property is worth less than they owe.
The council decided in a 4-to-1 vote Wednesday night to work with a company called Mortgage Resolution Partners.
The decision is not final. The company will first survey the city's housing market to see which homeowners could actually benefit and then report back to the city in 60 days.
Mortgage Resolution Partners wants the city to use eminent domain laws to buy underwater homes at the current market price which is a lot less than what homeowners paid for the property. The home would then be refinanced back to the original owner at a vastly reduced principal.
The company would help those homeowners refinance their houses and get a fee for the effort. The city would also benefit by getting money from fees.
A MRP spokesperson says the idea is to keep people in their homes and neighborhoods stable.
Eminent domain is usually reserved for massive projects that are supposed to be for the public good like freeways or public buildings.
Opponents of the plan include the Greater Las Vegas Association of Realtors.
According to the group, having cities use their eminent domain powers violates the original mortgage contract and scares away future investors.
The city is also getting outside legal advice about the plan, which will be presented when MRP presents its plan in 60 days.