This is in response to the editorial titled: “Bring pain to eminent domain” in the Las Vegas Review- Journal, August 11,2013.
This extremely biased condemnation of using eminent domain to rescue underwater homeowners with Private Label Securitization loans(PLSL), a special type of loan which exists in North Las Vegas,and other hard hit cities like Richmond,California, is highly misleading and irresponsible .
One must wonder if the R-J hasn’t changed it business model to that of investment banking and real estate. The R-J certainly makes no friends with troubled homeowners, and reeling communities hard hit by the U.S. real estate crisis.
The R-J editorial sides with the well heeled,lawyer studded, powerful investment banking and real estate interests, while at the same time stigmatizing a highly legitimate plan to rescue underwater homeowners, eliminate neighborhood blight,and prevent more vacant homes, overgrown yards,and increased crime in North Las Vegas, and other cities in similar situations.
North Las Vegas has suffered enough financial distress in recent years, living at” ground zero”in the housing melt down, with countless residents being uprooted from their homes, and an economic collapse with the unrelenting instincts of a shark in bloody waters. Now the R-J jumps on the shark’s back,with a blistering attack on a sensible plan to reduce homeowner distress,and help restore a community,and bring hope to a particular group on homeowners with these PLSL loans.
Approximately 3,000-4,000 of these loans exist in North Las Vegas. These are investor backed loans, which due to their complex and widespread multi investor make up,are nearly impossible to restructure or refinance. Accordingly,these loans are at a greater risk of default, threatening homeowners with foreclosure, and the loss of their homes.
A highly troubling aspect of the R-J’s attack on mortgage related eminent domain, is the editorial’s mention of threats by Fannie Mae and Freddie Mac to withdraw their substantial financial support from any community which uses eminent domain in this fashion. These are two of the largest financial institutions in the U.S. which had heavily backed the low quality, sub prime mortgage market, leading to their own financially distressed portfolios, and contributing to the market collapse which ended up costing taxpayers many billions of dollars, in addition to sinking the entire U.S. housing market.
I hope that the North Las Vegas City Council will carefully think through this highly unique and innovative approach to curing a painful period in the City’s history, carefully examine its requested independent legal opinion on this use of eminent domain,and then make a sensible decision free from influence of the heavily negative messaging being spread in the community by biased and self serving banks and real estate investors, who are attempting to evade the risk consequences arising from their investment decisions.