Foreclosure bill gets final OK
CARSON CITY — A bill that might help 17,700 Nevadans keep from losing their homes to foreclosure won final approval Friday in the Senate and now only needs Gov. Jim Gibbons’ signature to become law.
Senators on a 17-4 vote approved Assembly Bill 149 and then the Assembly agreed to a minor amendment added by the Senate.
The bill is Assembly Speaker Barbara Buckley’s plan to deal with the increasing number of foreclosures in Nevada.
Under the bill, home buyers in default would request a mandatory mediation hearing with the lender. Forms to do this would be available with the courts.
Court-appointed mediators would conduct hearings and try to work out new loan arrangements that would allow the buyer to remain in the home. The lenders, however, are not required to agree to make better loan arrangements for the buyer.
Some, however, would be expected to agree to new loans because they wouldn’t be able to sell a foreclosed home for anything near the value of the current mortgage.
The glut of foreclosed homes in Nevada has caused home values to plummet. Last year, 77,000 homes were foreclosed upon in the state.
“It is not going to help everybody,” Buckley, D-Las Vegas, said in a recent interview. “If someone has lost a job and they can’t get a new job, it isn’t going to help them. But it will help those able to afford a mortgage, just not one at the current rate.”
Typically these buyers were enticed into “exotic” mortgages, such as adjustable rate mortgages that initially had a low interest rate but now are too costly for them, she said.
Similar laws have been used in other states. Virtually all banks and lending companies backed the bill during hearings.
Once Gibbons signs the bill, the Nevada Supreme Court will set up rules for mediators, create forms for buyers to request mediation and name people to serve as mediation administrators in each county. The bill goes into effect July 1.
During a hearing, Chief Justice James Hardesty said more than 300 lawyers and 22 senior judges have signed up to serve as mediators. They would be paid as much as $400 for conducting the hearings, no matter how long they last. Half of that cost would be paid by the homebuyer and the other half by the lender.
Contact reporter Ed Vogel at evogel@reviewjournal.com or 775-687-3901.