Rolling the Dice on Foreclosure Mediation in Vegas

Image Credit: RRC Realty 

This blog has chronicled many of the legal efforts to hold lenders more accountable and enter into loan modifications and buyback programs with former mortgagors with an eye on accumulated procedural victories transforming into substantive change. This week, an NPR report on the state of the housing recovery in Las Vegas- the nation's former unofficial foreclosure capital- illustrates the potential for such substantive change. The story focused on the effect of Nevada's Assembly Bill 284 on reducing the number of homeowners in default on their mortgages amidst rebounding home values. The law, which forces banks to prove they have the legal right to foreclose on homes and requires bank workers to sign an affidavit that they have personal knowledge of a property’s document history, was partially responsible for the number of default notices issued in Nevada grinding to a near halt in the past eighteen months. In addition, the law also allowed many homeowners to remain in their homes and use the value of their home- increasing by the week in Vegas's newly hot market- to sell at price points where they can pay off their debts and avoid short sales and foreclosure. The report interviewed several such Nevadans who have avoided the auction block with the help of AB 284, including a woman who went from the brink of foreclosure to facing the rosy future of multiple offers for her Henderson home. While real estate, like Vegas itself, is never a sure bet, strong foreclosure prevention laws have helped level the playing field for mortgagors who were victims of the sandstorm of speculating that preceded the housing crisis.