A report to a legislative panel studying the mortgage lending crisis says Nevada, with the worst home loan foreclosure rate in the nation, is only now requiring education courses and a licensing exam for brokers and their agents.
The 2007 Legislature passed the requirements which take effect July 1, according to the report to Assemblyman Marcus Conklin, who chairs for the study panel. The change expanded on existing requirements for general competency and experience.
The report also shows that while Nevada has a typical regulatory scheme of licensing both brokers and agents and requiring a broker to have an office in the state, it differs from other states in not requiring a broker to post a bond.
Conklin, D-Las Vegas, said today that the report is part of numerous documents panel members are getting in their efforts to come up with suggested law and policy changes to deal with a rising tide of loan defaults and foreclosures.
"Every state is different," Conklin said. "We don't anticipate looking like all the other states. But to the extent we may not have done the best job we can to protect consumers, we need to take a look at that."
Besides licensing changes, Conklin said protections for the 2009 Legislature to consider could include help for people who rent or lease homes and then find that they have only a few days to pack up and leave because the property owner's loan has gone into foreclosure.
More than a fourth of the loans that were in default in Nevada in 2007 were for homes that weren't owner-occupied. That's more than twice the national average, according to the Mortgage Bankers Association.
Jon Sasser of Washoe Legal Services said there's no legal requirement in Nevada for property owners to tell renters or even someone who has a long-term lease that the property is going into foreclosure.
"Here's someone who has done absolutely nothing wrong, and the rug can be pulled out from under them on three days' notice," Sasser said, adding that foreclosing lenders only have to provide 72 hours' notice to evict tenants who may have never missed a rent or lease payment.
At its meeting Monday, the study subcommittee also got a letter from Senate Majority Leader Harry Reid, D-Nev., spelling out efforts by Congress to deal with the foreclosure crisis. Reid said those efforts include a House-approved measure to stop "irresponsible, predatory" loans to borrowers who can't afford them.
Reid also said raising loans limits for Fannie Mae and Freddie Mac, the government-sponsored entities created to help mortgage markets, would make it easier for borrowers to refinance "out of exotic loans that are facing default."
President Bush and House leaders reached agreement on a $150 billion economic stimulus package last week which included items to boost housing by increasing the size of the mortgages that Fannie Mae and Freddie Mac and the Federal Housing Administration can handle.
There's also a new state Web site to help homeowners who may be facing foreclosures. The state also has located some additional private-sector funding that could help expand the consumer assistance effort at some point.
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