PIGEON FORGE — Attorneys have filed paperwork to pay off mortgages on homes the city acquired through eminent domain, meaning former owners won't have to worry about making payments on their purchases in 2022.
Doug and Micah Race complained at the last Pigeon Forge City Commission meeting that the city demolished their home at 362 Ogle Drive while the title was still in their name and the mortgage company was still seeking payment.
It turns out that the Race family's lawyers had filed a motion in June to release funds set aside in court to pay the mortgage, but the process was stalled without being resolved.
That meant the Race family received a bill for the July mortgage payment on the home that was destroyed after the city took it over in June.
The consent order, entered by City Attorney Nathan Lowell, lawyers for the mortgage company and the Race family's lawyers, indicates the matter should be resolved.
When the legal process began, the city had already deposited $490,000 into the account based on the property's appraisal, which is believed to be the minimum the city would have to pay the couple for the property.
Under the agreement, the city will pay $220,137.59 to Nationstar Mortgage Co., which holds the mortgage on the property.
The agreement states that from the court funds “the lenders will be paid in full to repay Defendants Race's loan (the funds borrowed to purchase the property) and the remaining restitution will be paid in full to Defendants Race.”
This means the couple no longer have to worry about making payments on the property while they continue to fight with the city over how much they should receive for the property.
The order also requires the Reis to immediately pay an additional $179,862.40, leaving $90,000 in court-held funds.
The Races, originally from Ohio, bought the house and began renovating it with plans to rent it out for the night.
The couple was unaware that the home was located on the route of the city's planned West Side Connector, which the City Commission had approved months before they purchased it.
When they found out, they went to City Hall and inquired about the plans, saying they did not want to rent out a property that could be acquired at any time.
To resolve the situation, city officials offered to buy it.
But the family said they don't want to sell and would like the city to choose an alternative road route to provide drivers through the area as an alternative to the parkway.
They asked the city to pay $3 million for the property but then lowered their demand to $1.5 million, which they believe they could have gotten by renting it out for a number of years, according to communications with city officials.
When talks broke down, the city moved to acquire the land through eminent domain.
The Reis finally signed a consent order on May 6 that allows the city to occupy the property within 30 days.
The mortgage has been settled, but one issue remains to be decided in court: how much the city will pay the family for the property.
If the Reis and the city cannot agree on an amount outside of court, a jury will ultimately decide how much the city owes the couple.