Plan to save underwater borrowers sinks

by Adam Smith05 Sep 2013

A controversial plan to save underwater borrowers has been blocked.

MPA reported in July that Mortgage Resolutions Partners (MRP) was working with the city of North Las Vegas on a possible eminent domain plan to save underwater homeowners. The plan would see the city negotiate to buy notes on targeted, underwater homes at what they believe to be fair value, using the governmental power of eminent domain to acquire the loan from holders who were hesitant to sell.

But the Las Vegas Sun has reported that the North Las Vegas City Council has rejected the proposal, instead deferring to the state of Nevada to weigh in on the plan's legality. North Las Vegas mayor John Lee said the city did not have the resources to vet the proposal by MRP.

The plan, and others like it proposed by MRP in other hard-hit housing markets, drew the outrage of the mortgage industry. A similar plan proposed by MRP is still on the table in Richmond, Calif., and the Association of Mortgage Investors strongly condemned MRP's role in such plans.

"Mortgage Resolution Partners is not Robin Hood. MRP is a for-profit business  that runs an investment fund."


  • by John C Durham | 9/5/2013 9:53:13 AM

    We will have public banking of some kind or we all will go down with the TBTF style of Capitalism the owns our financial system and government. We are in a Republic not an Capitalistic Empire. Capitalism must work to do something for the "General Welfare". Right now the Big Banks are only an enormous liability to everyone.

    Public Banking does 40% of the Earth's banking, does it better and does it cheaper (by far), see: Bank of North Dakota:

    The State of Nevada sends their money to Wall Street when the Sun goes down everyday. Why take the public's money and give it away? Every dollar of public money could be leveraged many times and lent back to local government to renew the whole nation instead of giving it to banks to destroy the nation.

  • by Wm Matz | 9/5/2013 9:54:00 AM

    Interesting that "the mortgage industry" [AKA Wall Street] that created the massive MBS fraud on borrowers, investors, m.i. insurers, and local governments complains that someone might make a profit cleaning up their mess. Given court revelations that up to 100% of mortgages are not legally owned by the trusts that claim to be the owners, it would be nice to see some real sanctions against the major culprits.

  • by Larry | 9/5/2013 11:00:24 AM

    We need to keep in mind that this is not just big banks. If you sold your property and took back a note secured by DT then the government can say screw you secured contract we will decide if you canb kiss your funds by-by or not.


Should CFPB have more supervision over credit agencies?