Wednesday, June 17, 2009 | 12:29 p.m.
CARSON CITY – A new law requiring lenders to meet with homeowners in danger of foreclosure is expected to create numerous requests for mediation.
The Nevada Supreme Court, which is drawing up rules for these mediation sessions, held the first of two public hearings Tuesday.
Chief Justice James Hardesty said the court was already concerned about a wave of requests. He expects there will be 1,200 to 1,500 requests each month.
A homeowner who receives a foreclosure notice can request an opportunity to sit down with the lenders and a trained mediator and explore whether a mutually agreeable resolution can be reached.
Justice Mark Gibbons said there are different scenarios for every person who borrowed money and can’t make the house payment. He urged lenders to be flexible and make this mediation process a success.
He said the lender might consider short-term refinancing to help the homeowner through the economic downturn.
Steven Primak, a Las Vegas attorney, asked if there would be any assistance for homeowners who got their foreclosure notices before July 1.
Hardesty said the law does not apply to existing foreclosures. But he said after the mediators catch up with the expected load, the court may take steps to start a voluntary mediation process for those who got notices before July 1.
Under the proposed rules, homeowners and lenders will share the costs of the mediators with a maximum $200 assessed to each party.
The next public hearing is June 26 in Las Vegas. The court expects to adopt the rules June 29 and the first mediation sessions will probably be in August.
The court is going to locate the program in Las Vegas and hire a director to manage it. There are already 19 applications and the court hopes to have the person on board by July, Hardesty said.
More than 350 lawyers have expressed interest in serving as mediators. The first mediation sessions will be conducted by senior judges and Supreme Court settlement judges. The lawyers will be required to have training, Hardesty said.
He said the first draft of the regulations didn’t jive with the Assembly Bill 149 that passed. That’s because the regulations were prepared before the bill passed in its final form.
Those technical corrections have been made in the regulations.
Assembly Speaker Barbara Buckley, D-Las Vegas, the major sponsor of the bill, said when it passed in May that Nevada has the highest foreclosure rate in the nation “which is causing home values throughout the state to plummet and is a major contributor to our state’s current economic crisis.”