North Las Vegas Won't Release Opinions on Eminent Domain Plan

Industry Update: On September 3, the Las Vegas Review-Journal published an article titled North Las Vegas Won't Release Opinions on Controversial Eminent Domain Plan.

North Las Vegas won't release opinions on controversial eminent domain plan

Two outside legal opinions of the constitutionality of a controversial plan to use North Las Vegas’ power of eminent domain to seize underwarter mortgages won’t be made public, acting City Attorney Sandra Douglass Morgan said.

Morgan said the opinions -- solicited by former City Attorney Jeff Barr as part of a June 19 agreement meant to help the city explore adoption of the divisive mortgage refinance proposal -- are subject to attorney-client privilege and won’t be seen outside City Hall.

The plan being pushed by Mortgage Resolution Partners calls for North Las Vegas to buy at-risk home loans currently held by banks and mortgage security investors.

The city, working with MRP, would look to buy the loans at less than face value and resell them to homeowners at a lower monthly payment. If a bank rejects a company-backed opening bid the city would then seize the loan, paying the bank a price based on the property’s current fair market value rather than the value used in setting the original home loan. The bank would have to write off the difference.

The San Francisco-based company would collect a $4,500 per transaction fee and the city stands to collect a percentage of proceeds on the successful resale of as many as 4,200 qualifying loans.

The company’s plan would apply only to so-called private label securities, or those not owned by federally-backed mortgage holders Fannie Mae and Freddie Mac. Federal loan officials have warned the city that the federally-backed companies would likely “limit, restrict or cease business activities” in communities that adopt the eminent domain proposal.

Morgan, who stepped in for Barr after his Aug. 14 resignation alongside former City Manager Tim Hacker, declined to give her legal take on the mortgage refinance plan.

Last month, she parried a pair of requests made under the state public records act for the right to inspect the independent legal opinion, including one from plan opponents at the the Greater Las Vegas Association of Realtors.

GLVAR spokesman Sean Fellows, who made his client’s case for releasing the opinions at a City Council meeting last month, lamented Morgan’s decision to keep the findings sealed.

“Back on the 19th of June, you asked for outside legal opinions to address the constitutionality of what MRP was asking you to do as a city,” Fellows told City Council members at a meeting Aug. 21. “I want to ask, in the interest of transparency and public policy, that you waive (attorney-client) privilege.

“Because these opinions, Mayor, touch on very fundamental issues of community welfare and should not be hidden from the public.”

The council is set to adopt or reject the controversial mortgage refinance plan at a meeting scheduled for 6 p.m. Wednesday in the Council Chambers at 2250 Las Vegas Blvd. North.

North Las Vegas would be the sixth municipality to pick up the effort, which won the blessing of the Richmond, Calif. City Council in July.

To view the online article, please click here.

About Safeguard 
Safeguard Properties is the largest mortgage field services company in the U.S. Founded in 1990 by Robert Klein and based in Valley View, Ohio, the company inspects and maintains defaulted and foreclosed properties for mortgage servicers, lenders,  and other financial institutions. Safeguard employs approximately 1,700 people, in addition to a network of thousands of contractors nationally. Website:


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