CARSON CITY -- The state Supreme Court has begun developing rules to carry out the just-approved law that could save some Nevadans from losing their homes to foreclosure.
As many as 17,700 Nevadans were expected to keep their homes under Assembly Speaker Barbara Buckley's Assembly Bill 149.
Under the law, which takes effect July 1, homeowners facing foreclosure can request a mandatory mediation hearing with the lender. Lenders must send representatives who can renegotiate the loan terms but are not required to give homeowners better loan arrangements.
Some might, however, because plummeting home values driven by the glut of foreclosures mean many houses can't be sold for anything near the price of their current mortgages.
"This is a way to help people who have been given a notice of foreclosure, but the bank has not taken ownership of the property," Supreme Court spokesman Bill Gang said Monday.
The Supreme Court will hold public hearings on the proposed rules June 16 in Carson City and June 22 at the Regional Justice Center.
The court hopes to approve final rules and list them on its Web site by July 29. Mediation hearings would start a month later.
"I believe through this new law and our mediations, we are going to save some homes and help ease the burden for some lenders," Chief Justice James Hardesty said.
Nevada had 77,000 home foreclosures last year.
Buckley, D-Las Vegas, said the law will not help everyone, but it might help homeowners who are employed and can afford the cost of a conventional mortgage.
"If someone has lost a job and they can't get a new job, it isn't going to help them," she said. "But it will help those able to afford a mortgage, just not one at the current rate."
Typically these buyers secured "exotic" mortgages such as adjustable rate home loans that started with low interest rates that ballooned and made the mortgages unaffordable, she said.
Virtually all banks and lending companies backed the bill during legislative hearings.
The law applies only to owner-occupied homes. As currently proposed, mediation hearings could be requested only by homeowners who have received foreclosure notices on July 1 or later.
During a legislative hearing, Hardesty estimated as many as 3,000 mediation hearings per month could be requested by homeowners in danger of losing their homes.
More than 350 lawyers, including former judges, have offered to be mediators. They would be trained to conduct the medication hearings. In the meantime, senior judges and Supreme Court settlement judges will handle the hearings.
Mediators will be paid up to $400 to conduct hearings, no matter how long they last. The cost will be shared by the lender and homeowner.
The foreclosure program would be self-funded, with its three staffers being paid through increased court filing fees outlined in Assembly Bill 65, which Gov. Jim Gibbons signed into law.
"We knew that the bill likely would pass, and we knew that the time frame would be short for creating a system to handle what may be an overwhelming number of cases," Hardesty said.
A group led by Hardesty has been meeting for more than eight weeks to discuss tentative rules and operations for the program.
Justice Mark Gibbons chairs a subcommittee drafting the program's rules, while Justice Ron Parraguirre heads a subcommittee on recruiting and training mediators.
Contact reporter Ed Vogel at evogel @reviewjournal.com or 775-687-3901.