Council will seek state real estate disclosure law

Dan Kulin

Thursday, Oct. 17, 2002 | 9:53 a.m.

After hearing about a North Las Vegas woman who moved into a home only to later find out it once housed a methamphetamine lab, the City Council voted to seek a state law to require banks and mortgage lenders to tell prospective buyers about conditions that could affect the value of a property.

Mortgage Bankers Association of Nevada President Sandy Lindsay said Realtors and others are already required to disclose such information, and he was unaware of the exemption for banks and mortgage companies until North Las Vegas officials raised the issue. He said the association probably would support the city's request.

"We would definitely not oppose it. I think we would support it," said Lindsay, who is also a senior loan officer at First Horizon Home Loans in Reno.

"We have no qualms with full disclosure ... We're always in favor of protecting the consumer," Lindsay said. The association represents 64 banks and mortgage lending companies in Nevada, he said.

Councilwoman Stephanie Smith raised the issue after a woman who moved into a home that had been the site of a methamphetamine lab contacted her several months ago.

Smith said the woman didn't know about that part of the home's history when she bought it. Residue from the chemicals used to make the drug hurt the woman's child, Smith said.

Lindsay said apparently the exemption applies to banks and mortgage lenders selling properties that were foreclosed on.

"You and I have to disclose (this information) but not financial institutions," Smith said. "It's a loophole. It's a public safety issue."

"I think full disclosure would fix something like this," Lindsay said.