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Tue, 2 Aug 2011 11:24:05 AM

Three New Nevada Laws Offer Hope for Homeowners Facing Foreclosure


Three new laws already in place or scheduled to take effect later this year are expected to offer significant protection to homeowners at risk of foreclosure in Nevada. All three bills were passed during the 2011 legislative session and place strict new requirements on banks and mortgage lenders in pursuing foreclosure proceedings. This is good news for homeowners in Nevada, which leads the nation in foreclosure rates and has done so for the past four years; Las Vegas has been especially hard hit by the recent housing crisis. Senate Bill 414 and Assembly Bills 273 and 284 are designed to lessen this burden and to provide greater motivation for banks and other lenders to work with homeowners while eliminating some of the worst excesses in the mortgage lending industry.

Senate Bill 414

Already signed into law and effective as of June 2011, this legislation protects homeowners against unreasonable delays by banks in authorizing short sale offers. SB 414 requires banks and mortgage lenders to respond within ninety days to short sale offers unless all parties agree to a delay; additionally, banks can no longer seek deficiency judgments against borrowers if the foreclosed property was their primary residence. This is expected to relieve some of the pressure on borrowers who, having already lost their homes, were presented with even more debt after the short sale of their property.

Assembly Bill 273

AB 273 is also already in effect and prevents lending institutions from collecting deficiency amounts in excess of the amount the institutions paid for the notes in question. This is known as double dipping and has been a persistent problem for borrowers in Nevada. The bill also reduces the time available for secondary mortgage lien holders to file for deficiency judgment from six years to six months, a major change in the legal code and a real protection for Nevada borrowers.

Assembly Bill 284

Failure to maintain adequate and accurate records on the current holders of mortgage notes and the paper trail that identifies any transfers has been a persistent problem throughout the housing crisis and has created questions regarding the legality of many foreclosure proceedings. AB 284 is scheduled to take effect in October 2011 requires that institutions prove ownership of the property in question before beginning foreclosure proceedings. This is expected to delay or halt a number of foreclosure proceedings while the appropriate documentation is located for the property. New requirements for foreclosure trustees are also included in the bill.

All three bills are expected to provide added protections to homeowners facing default or dealing with the aftermath of foreclosure. Additionally, the added requirements and restrictions for banks and lending institutions may help to reduce the number of new filings, allowing Nevada residents a respite from the crushing effects of the housing crisis in their state.

 

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