CARSON CITY -- Her bill wouldn't help every person behind on home mortgage payments, but Assembly Speaker Barbara Buckley said Tuesday that analyses show it could keep 17,700 Nevada families from losing homes to foreclosure.
On a 41-0 vote, the Assembly approved her Assembly Bill 149, which would allow homebuyers facing foreclosure to request a mandatory mediation hearing.
During these hearings, a trained mediator, either a lawyer or judge, would determine whether a new loan arrangement could be reached between the homebuyer and the lender to keep the buyer from losing the home.
Lenders would not be required to agree to a more favorable loan for the buyer. However, some 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 on in the state.
"It is not going to help everybody," said Buckley, D-Las Vegas, after the vote. "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.
The bill still must be passed by the Senate and signed by the governor before it can become law.
However, Buckley does not foresee any big obstacles. Virtually all banks and lending companies backed the bill during hearings.
AB149 would not go into effect before July 1. In the meantime, Buckley advised people in danger of losing their home to foreclosure to call 211, which is a statewide phone number people can call to get help and ask for names and numbers of credit counselors who work for nonprofit groups.
The Nevada Supreme Court has agreed to set up rules for mediation and develop training programs for mediators. Training is expected to commence in June.
Under the bill, a lender would have to send to mediation someone with the power to make new loan arrangements. If the lender does not show up at the mediation hearing, then the case would be sent to District Court, where a judge could make new loan arrangements.
If a buyer does not show up at mediation, then the lender could proceed to foreclosure against the home.
Buckley said she has received many calls from buyers who are not in foreclosure but concerned they will be soon and want to secure new loan arrangements before receiving a foreclosure notice.
Her bill would allow the Supreme Court to set rules for such situations.
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 $340 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.
A $50 filing fee would be paid by the buyer when he or she requests a hearing.
When asked about the fees during a hearing, Buckley said if someone cannot pay $220, then they probably could not afford even the cost of a new loan.
Contact reporter Ed Vogel at evogel @reviewjournal.com or 775-687-3901.