State considers program to buy, resell homes near foreclosure

CARSON CITY - Nevada could set up a nonprofit organization to buy homes near foreclosure, fix and then sell them, legislators were told Tuesday.

Bruce Breslow, director of the Department of Business and Industry, told a legislative budget subcommittee Tuesday that as many as 700 to 800 homes might be bought in the first year under the Home Retention program.

He suggested a $140,000 home could be resold for about $200,000.

Breslow said the plan is "not a panacea" to housing problems in Nevada, noting the mortgage settlement funds cannot be used to buy abandoned homes. But, he said 52,000 home buyers are "seriously underwater" in their mortgages and these are the types of homes that could be purchased.

None of the homes would be "sold on the courthouse steps" to investors, he added.

Funds for the purchases would come the $49 million settlement from mortgage companies paid to the state, along with $100 million from the U.S. Treasury Department. Breslow said the plan must be approved by the treasury, a six-month process.

Versions of the plan are now in effect in two states, he added.

Legislators expressed support after Breslow assured them the program would be structured to eliminate any state liability for costs.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.