Q: What’s your take on this new state law called the Homeowners’ Bill of Rights? What will this do to help homeowners? And what do you think it will do the housing market?
A: I’m glad you asked. Nevada Realtors are working hard to educate the public and people in the real estate profession about this new state law.
First, you should know this Homeowners’ Bill of Rights took effect Oct. 1 here in Nevada.
The law began its legislative life as Senate Bill 321, sponsored by State Sen. Justin Jones, D-Las Vegas. It passed the Legislature unanimously in 2013 and was signed into law in June by Gov. Brian Sandoval.
You can find out more about this law by visiting the website of the Nevada Association of Realtors (www.NVAR.org). You can read the at www.leg.state.nv.us/Session/77th2013/Bills/SB/SB321_EN.pdf.
To answer your questions, our association experts tell me this law should not have an adverse or dramatic impact on the local housing market.
Basically, we think this law should help responsible homeowners who are trying to work with their lenders. It should not help those less responsible homeowners who may be trying to work the system to stay in their homes longer without paying their mortgages.
Here are highlights on what this law does:
■ For homeowners, one of the best parts about this law is that it prohibits banks from “dual-tracking,” or trying to foreclose on a home at the same time they are working toward a short sale with the homeowner.
■ By preventing “dual-tracking,” this law should promote and protect short sales as a more beneficial alternative to foreclosure for many homeowners.
■ The law mostly mirrors the 2012 national mortgage settlement between the nation’s largest banks and states throughout the nation.
■ SB 321 places some restrictions on mortgage lenders, as well as on borrowers. For instance, it offers distressed homeowners “one bite at the apple” when seeking various types of mortgage relief from their lender. Once an initial request has been resolved and options exhausted, lenders are free to foreclose when foreclosure is warranted.
■ The Homeowners’ Bill of Rights requires homeowners to respond to bank offers for foreclosure prevention alternatives within 14 days after the borrower receives the offer. The offer is considered to be rejected if the borrower does not accept or reject the lender’s offer within 14 days of receiving it.
■Under SB321, banks must establish a single point of contact when dealing with distressed homeowners. This helps homeowners and Realtors, who are often frustrated when dealing with banks on behalf of their clients.
Here are some things this law will not do:
■ SB321 will not allow homeowners to stay in their homes longer without paying their mortgages.
■ This law does not apply to financial institutions such as credit unions or small community banks that have foreclosed on 100 or fewer properties in Nevada.
■ Major banks that are already complying with federal Consumer Financial Protection Bureau regulations are exempt from SB 321.
I hope this helps you and other readers, and I hope this clears up some of the confusion about this new law that I’ve been hearing around town.
Please send your real estate questions to me at firstname.lastname@example.org.
Dave Tina is the 2013 president of the Greater Las Vegas Association of Realtors and has worked in the real estate industry for more than 35 years. GLVAR has more than 11,000 members. Email questions to email@example.com. For more information, visit www.lasvegasrealtor.com.