Nevada Revives Foreclosure Mediation at the Eleventh Hour
On June 12, 2017, Governor Brian Sandoval signed into law Senate Bill 490 — legislation that will revive foreclosure mediation in Nevada — just as the original program about to sunset. This may be good news for delinquent homeowners, who faced limited options without the program. In particular, it offers a second chance at redemption for homeowners who have been unable to file for foreclosure mediation since the end of 2016.
Due to some details in the restructuring of the original program, however, it remains to be seen exactly how the new legislation will be implemented or what impact it might have on lenders and real estate investors.
What You Should Know About Nevada Senate Bill 490
SB 490 revives the existing Foreclosure Mediation Program, with the following changes:
• The program will now be administered by the Housing Division instead of the Nevada Supreme Court.
• There is no sundown clause in this bill.
• It will cost more to hire a mediator — SB 490 raises the fee from $400 to $500 — and the cost must now be split evenly between the homeowner and lender.
• All petitions must be filed with the district court — previously, that was a requirement only when a program arose during the mediation phase.
• Beneficiaries have to include any documentation concerning a loan modification in addition to the usual information related to the property.
Potential Ramifications of the Bill
There are two interesting things about SB 490. First, it will be administered by a state-affiliated nonprofit, Home Means Nevada, Inc. In 2015, Nevada passed on another foreclosure related program, the Nevada Home Retention Program, to Home Means Nevada, and the program ended up spending too much on foreclosure notes and falling thousands of homes short of its goal to help distressed homeowners.
Second, the bill does nothing to address the mediation process itself. Lenders may continue to hire foreclosure companies to represent them at the mediation table, a practice that has helped to expedite the process. Whether the district court or the new administrator intend to make significant changes remain unclear; in fact, it is not even clear how much influence the district court will have.
In the final analysis, SB 490 seems poised to be a frustration both for homeowners seeking to escape foreclosure, who may find their petition back-logged for months in the court system, and for lenders who can look forward to more petitions, red tape, and potentially costly delays. As of August 2017,office operations and procedures have not been implemented resulting in additional complications for foreclosure trustees.
About Peak Foreclosure Services, Inc.
Specializing in a wide range of default servicing solutions, Peak Foreclosure is ready to meet the needs of banks, private investors, servicers, and sub-servicers. They offer in-house judicial foreclosure services, reconveyance and post foreclosures services in seven states — Arizona, California, Idaho, Montana, Nevada, North Carolina, and Washington — and have a team of specialists in each area of real estate to ensure the highest standards of service and client satisfaction.