Some foreclosure relief

Monday, Feb. 16, 2009 | 2:08 a.m.

A bill working its way through the Nevada Legislature offers some hope for homeowners who are trying to stave off foreclosure.

Assembly Bill 149 would give them the option of requesting a court-supervised meeting with their mortgage holder. Before any further effort to take possession of the home, the bank or other lending institution would have to send a representative to the meeting.

Although the representative would not be required to renegotiate the terms of the homeowner’s mortgage, the bill states that he must at least have the authority to do so.

This kind of mediation does not come with any guarantees, but experience shows that it works in many cases. Many states, including New Jersey, New York, Ohio, Connecticut, Pennsylvania, Michigan, Iowa and Florida, have passed some form of foreclosure mediation legislation.

AB 149, sponsored by Assembly Speaker Barbara Buckley, D-Las Vegas, would go into effect July 1. As it stands, the bill has substantial bipartisan support in the Legislature and several lending businesses have expressed their support.

The Obama administration is also working on legislation whose central idea is to encourage modified loans as an option to foreclosures. Last week Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, asked leaders in the mortgage industry to postpone foreclosures at least until details of the legislation are announced in a few weeks. Many banks nationwide, including some of the largest, said they would honor Frank’s request.

Such news is encouraging, but home foreclosures remain a crisis and are expected to be all year, especially in Nevada. Our state leads the nation in rate of foreclosures and Las Vegas is second worst among the nation’s metropolitan areas.

Buckley’s bill would be a good companion to any federal legislation that is passed. Mediation represents a chance for both lenders and homeowners to benefit — something that cannot come too soon.