"The focus is to learn about this potential tool," Hacker said. "Mortgage Resolution Partners approached all the local jurisdictions months ago. They've been working toward these kinds of presentations to elected bodies. My understanding is we're just first in the hopper."
Property devaluations and foreclosures have hammered North Las Vegas, Hacker said, and potential ways to improve the situation need to be investigated.
"I think we need to evaluate any and all programs that appear to strengthen our communities by ... keeping people in their homes," he said. "It's all very speculative because there's still a lot to learn (about Mortgage Resoultion Partners) as far as its usefulness for our particular situation in North Las Vegas."
Approximately 4,700 underwater homeowners in North Las Vegas, 38 percent of whom are delinquent on their mortgages, would qualify for Mortgage Resolution Partners' refinancing plan, according to the company.
The company eventually hopes to involve other local governments in Clark County, which the company says has about 40,000 underwater homes that could be helped through the program.
County Commission Chairman Steve Sisolak said he's met with Mortgage Resolution Partners representatives several times, but he's not sure whether the full board will take up the "complicated issue."
"I think they're going to have to meet with the commissioners individually first before we move forward with it. I've spent literally six, eight, 10 hours with those folks going over it. It's not the kind of discussion you can have in 30 minutes," Sisolak said. "I'm always interested in listening, but I've got an issue using eminent domain for that process. I don't know if I can support that."
If the North Las Vegas City Council approves the item at its Wednesday meeting, it will enter into an advisory agreement with Mortgage Resolution Partners that will allow the company to begin surveying the housing market in North Las Vegas, identify potential targets and estimate the cost to acquire them. The work would be done at no cost to the city, and further council approval would be needed before any mortgages were acquired.
Four cities in California -- La Puente, El Monte, San Joaquin and Orange Cove -- have made similar agreements with Mortgage Resolution Partners, the company said. If it enters into such an agreement, North Las Vegas would be the biggest city to partner with Mortgage Resolution Partners.
The use of eminent domain to seize mortgages has sparked controversy and led to questions of whether such a seizure is legal. Eminent domain typically is used to seize land for "public use" such as building roads or other infrastructure. But Mortgage Resolution Partners thinks the law can be read to include a broader interpretation of "property" that would include mortgages.
Mortgages seized through eminent domain could be held by securities that draw investors from a variety of groups besides financial institutions, such as pensions or retirement accounts, Uffelman said.
"It could be your retirement account that's an investor in this mortgage," he said.
Uffelman said a variety of federal and state programs already are targeting aid to underwater homeowners, but Mortgage Resolution Partners argues existing programs aren't doing enough to address the problem.
The company's plan would specifically target loans that are severely underwater and are owned by trusts through mortgage-backed securities instead of bank-owned or federally owned mortgages.
Acquiring a mortgage through eminent domain would require the city to pay "fair-market value," which could be negotiated with the servicer of the mortgage or decided in court.
Once a value is decided upon, Mortgage Resolution Partners' private investors would provide the financing for the city to acquire the property. The city or a city-owned subsidiary would own the mortgage until it was refinanced with a federally guaranteed loan.
The North Las Vegas City Council meets at 6 p.m. in the Council Chambers at North Las Vegas City Hall, 2250 Las Vegas Blvd. North.
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