Nevada mortgage banker advisory committee named

Wednesday, Sept. 29, 1999 | 10:39 a.m.

CARSON CITY -- Five people, including the son of Gov. Kenny Guinn, were named to an advisory council to make recommendations on regulations and laws on the mortgage investment industry, rocked last year by the Harley Harmon investment company scandal in Las Vegas.

The 1999 Legislature tightened the law on investment banking, and at the request of the industry, created the five-member advisory board to make suggestions to the state Commissioner of Financial Institutions and the Legislature.

The Legislative Commission on Monday selected Jeffrey Guinn, Connie Ferris and James Lytner, all of Las Vegas; and Marty Levasseur and John Royce, both of Reno, to serve on the board. All are involved in the investment business.

Council members will have to put up their own money for traveling to meetings since the state did not provide any funds. The group is authorized to conduct special studies and advise the state and Legislature on possible laws for mortgage investments and lending. It may also make suggestions on the educational requirements for persons to enter the business.

Levasseur, who lobbied for the industry, said one of the first things the advisory council will do is to assess the 1999 law. He said the new law was "meant to punish all the mortgage companies for the problems of Harley Harmon."

"There was a lot of overkill in that bill," he said, and it particularly hurt small business owners. For instance, he said mortgage brokers can't estimate the value of a property. Instead if a consumer requests it, an independent certified appraiser must be used.

Levasseur said most mortgage lenders know the value of a property better than an appraiser.

The most important function of the new council, Levasseur said, will be its voice in reviewing the proposed regulations by Financial Institutions Commissioner Scott Walshaw. "Up until this time, the commissioner was unopposed in the development of regulations," Levasseur said. "That won't happen from now on in."

"The laws and the interpretation made by the commissioner are at odds with what the industry feels," he said. "We hope to influence good lending laws."

The law, authored by a subcommittee headed by Assemblyman David Goldwater, D-Las Vegas, came after millions of dollars were lost last year by residents of Southern Nevada who invested in the Harley Harmon mortgage investment plan.

The new law regulates companies that use their own money to make loans secured by liens on real property. It imposes more stringent regulatory controls and licensing requirements on mortgage brokers and mortgage agents who solicit funds from the public.

The measure requires certain mortgage brokers to maintain a minimum net worth and it establishes a program under which the state can register, conduct background investigations and supervise mortgage agents.