In Carson City, a new bill focused on foreclosures looks to allow homeowners in Nevada the opportunity to walk away from a foreclosure or short sale without the threat of a lawsuit to pay back the deficiency. Under Senate Bill 346, discussed Tuesday in a Senate Judiciary Committee, loans would essentially be modified so single-family residences would be protected from judgments even after they no longer own the property.
Current law already provides some protection, but this bill would specifically target single-family homeowners whose property is their primary residence. Opponents argue the passage of this bill would result in a further plummet of prices and home values as there will be no consequences for the homeowners to simply walk away from their property.
Assemblyman Tick Segerblom, D-Las Vegas, feels this may be the only way to affect immediate mortgage issues and he dismisses concerns that the bill would have a significant impact on housing prices. His hope is that the homeowners will have leverage against the banks, and "if it's a choice between the bank suffering or the homeowner suffering, I'd rather it be the bank."
The other concern is that the passing of the bill would detract investors.
Showing that Nevada doesn't stay true to it's contracts. I disagree with this idea. Granted I have not read the bill, but the homeowners aren't the reason they can't pay their mortgages. They apply for mortgages with the intent to pay them back and I think ultimately they would prefer to stay in their homes. Unfortunately, the market tanked and jobs are scarce- they are simply unable to continue to pay their mortgages. Most people are trying to modify their loans, but to no avail. So their ONLY options are to either walk away from the property, or hope that the bank will forgive their deficiency with the use of a lawyer. To say homeowners are getting away scott free if the deficiency were waived is, I'm sorry to say, mistaken. Their credit is affected, they have to move out and find another home/job sometimes out of state, and unless the banks become more willing to work with homeowners this is the only "right" thing to do.
As for the idea that investors won't want to come to our state and invest?I disagree also. The only investors that would probably be affected by the passing of this bill are the ones that are buying up notes with the intent to go after the borrower. I'm sure these investors will be alright, they're smart people who can make money a different way.
As for the prices being affected, I would think that if the banks weren't allowed to go after the deficiency they would either hold out for more money at the time of purchase or would be more willing to work to modify the loan. Both good things for the economy, and homeowners. I guess time will only tell. Will this be the end of all problems? No, of course not, but personally, I think this is a step in the right direction. As of yet
no action was taken on the bill.
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