CARSON CITY " Lawmakers were urged Monday to pass a measure aimed at ending the downward spiral of home foreclosures in Nevada, which has the highest foreclosure rate in the nation.
Assembly Speaker Barbara Buckley, D-Las Vegas, told the Senate Commerce and Labor Committee that her AB149 would mandate good-faith mediation between lenders and borrowers, and has drawn bipartisan support from legislators and widespread backing from the business community.
Buckley said the process and information provided by the measure is important to help Nevada's housing market to recover.
"It's hard for us to drive down the blocks in our districts without seeing foreclosures signs on every block," said Buckley, who directs a nonprofit legal aid organization when she isn't in the Legislature.
The measure would require a mortgage lender or servicer to participate in mediation if it's requested by a borrower. Mediations would be handled by a senior judge, hearing master or other judicial-branch designee.
The lender also would have to provide a default notice, contact information for a person authorized to negotiate loan modifications, information about a local housing counseling agency, and a form explaining that borrowers can request court-mandated loan modification.
Chief Justice Jim Hardesty said he appointed a working group in anticipation of the bill's passage to help guide the court in preparing rules for a "sizable program."
"Make no mistake about this. The court is facing 1,200-1,500 mediations per month shortly after July 1 in Clark County alone. This is a major undertaking for the judicial system," Hardesty said.
Many attorneys statewide have stepped forward to help with the proposed program, said Hardesty, adding, "We have lawyers from all over the state, Elko, Ely, Douglas County, Las Vegas, you name it."
There were 77,693 properties in foreclosure in Nevada in 2008, more than double the number in 2007 and a fivefold increase over 2006, according to Realty Trac. The Center for Responsible Lending projects said that 72,157 Nevada properties will face foreclosure in 2009.
Home values in Nevada decreased by an estimated $6.5 billion from 2008 to 2009, and Buckley said that real estate prices are continuing their "free fall" with the bottom not in sight.