Nevada Locality Latest to Explore Use of Eminent Domain to Seize Mortgages

Eminent Domain

On June 19, the city council of North Las Vegas, Nevada, reportedly voted to explore the potential use of the government’s eminent domain powers to seize underwater mortgages from trusts, write down the loan principal, and re-sell the altered mortgages to new investors. In January, a California county that had threatened such a course voted to abandon the concept. Since then, several other California cities have signed agreements with a third-party to explore the issue, with North Las Vegas now deciding to pursue a similar path. To date, however, no locality has taken the next step to implement a mortgage seizure plan.