North Las Vegas officials have voted unanimously to scrap a proposal that would have allowed the city to purchase underwater mortgages and refinance them into better terms for the borrowers. The use of eminent domain -- which allows governments to seize private property for a public good -- was deemed unnecessary in light of growing appreciation in the North Las Vegas home market.
The plan had been pitched by Mortgage Resolution Partners (MRP), which also had pursued, unsuccessfully, similar action in several California jurisdictions -- most recently, the city of Richmond. In Las Vegas, City Councilman Wade Wagner verbalized the council's doubts about the MRP proposal. "They want the performing mortgages they assume will default in two, three, four years down the road," he explained. "That's a mighty big assumption with property values climbing."