New short-sale rules send Nevada’s foreclosure rate through the roof
Sam Morris / Las Vegas Sun
Nevada’s foreclosure rate almost doubled last month from a year ago as banks, facing new rules that could make it harder to seize distressed homes, cranked up pressure on delinquent borrowers.
One in every 249 housing units statewide received a foreclosure-related filing in September, up 44 percent from August and up 97 percent from September 2012, according to a new report from Irvine, Calif., research firm RealtyTrac.
Nevada’s foreclosure rate last month was highest in the country for the second consecutive month. Nationally, one in every 998 homes received a foreclosure filing in September.
The report counts notices of default, scheduled auctions and bank repossessions.
Nevada was hit hard with default notices, which start the foreclosure process. A total of 2,763 notices were filed statewide last month, nearly double the amount filed in August, according to RealtyTrac.
The burst of activity came before Nevada’s “Homeowner’s Bill of Rights” took effect Oct. 1. The law, Senate Bill 321, might stretch out the foreclosure process and make it easier to avoid foreclosure through renegotiating a loan or completing a short sale, in which a bank agrees to sell a house for less than what’s owed on the mortgage.
The law requires lenders to have a single point of contact for struggling borrowers, who complain that banks are bogged down by bureaucracy and give conflicting information.
It also bars bankers from trying to seize a person’s home while also pursuing a short sale at the same time, and it forces lenders to provide homeowners with foreclosure prevention options and other information before seizing a house.
On Sept. 30, the day before the law took effect, 934 notices of default were filed in Clark County, the largest one-day total ever for the region, according to LV Default, a Las Vegas research firm.