Andrew Edwards, Staff Writer
Created: 07/13/2012 11:23:10 AM PDT
Leaders of the newly formed Homeownership Protection Program have yet to decide how they will try to solve San Bernardino County’s lingering foreclosure woes, but the potential use of eminent domain to take over mortgages continued to arouse objections from industry groups when the group convened its first meeting on Friday.
The joint powers authority, or JPA, also received additional criticism from opponents Friday in light of news that county chief executive Greg Devereaux met with Mortgage Resolution Partners, the San Francisco company proposing the eminent domain idea, months before officials talked about it in public meetings.
San Bernardino County, working with the cities of Ontario and Fontana, created the JPA in June and expressly gave the new agency power to buy mortgage loans by voluntary purchase or through eminent domain.
Eminent domain means a court could force whoever owns property to sell it to a government agency for whatever amount is determined to be fair market value. People on both sides of the issue say using eminent domain to purchase a mortgage contract is unprecedented in this country.
The new agency’s leaders have not actually decided to use eminent domain, and Devereaux said the JPA will issue a “wide open” request for proposals to help troubled homeowners. Devereaux said the JPA itself can provide a forum to debate whether eminent domain is the best tool for local government to help homeowners.
Paul Herrera, government affairs director at the Inland Valleys Association of Realtors, said he was not accusing anyone of a “backroom deal,” but he criticized JPA officials for giving it power to use eminent domain before that debate took place.
“It’s our opinion that it wasn’t necessary to take as aggressive a step as they did,” Herrera said.
The Sun and Inland Valley Daily Bulletin on Friday confirmed reports published by the Reuters wire service that Devereaux spoke with Mortgage Resolution Partners on Jan. 31 and in the following month signed a confidentiality agreement with the company.
County spokesman David Wert said county officials routinely sign nondisclosure agreements with companies making proposals. The agreements are usually made when a technology firm wants to propose a new product without tipping off competitors.
In the case of Mortgage Resolution Partners, Wert said Devereaux received direction from the Board of Supervisors during his March performance review to pursue the firm’s eminent domain idea as one of his job objectives for the coming year.
Devereaux broke off private conversations with Mortgage Resolution Partners after it became clear that the county was interested in the idea, Wert said.
“Mr. Devereaux went to extraordinary lengths to make sure this wasn’t discussed in private after we decided this was something the county wanted to pursue,” he said.
The Fontana City Council approved the JPA in early May and county supervisors discussed the idea publicly during their budget talks that month.
Earlier on Friday, the new JPA held its organizational meeting at the San Bernardino County Government Center. The JPA’s board members selected Devereaux as the JPA chairman and agreed to meet again on Aug. 16.
The meeting opened with the JPA finding itself at the center of a developing national eminent domain debate. Nearly 20 trade organizations have gone on record against Mortgage Resolution Partners’ idea.
Those groups include the inland Realtors group as well as the Securities Industry and Financial Markets Association, or SIFMA, which appeared at Friday’s meeting to insist eminent domain not be used.
Their objections include their view that lenders will avoid San Bernardino County if the government can leverage its powers to take over mortgage contracts and modify their terms.
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