Republican senators block state funding for foreclosure counseling
November 14, 2007
With two Democrats absent, Republican Sens. Barbara Cegavske and Bob Beers managed to block plans to create an 800-number system to provide counseling for Nevadans facing foreclosure.
A majority of Assembly Ways and Means committee members were behind the idea, but because only five members of the Senate Finance Committee were present, Chairman Bill Raggio, R-Reno, needed at least one of the two – Cegavske or Beers – to vote for the proposed $400,000 system to get a majority of four on the Senate side of the joint committee. If Democratic Sens. Dina Titus and Bob Coffin, both of Las Vegas, hadn’t left the IFC meeting to return home two and a half hours into the daylong meeting, Cegavske and Beers’ votes wouldn’t have been necessary.
Raggio spent nearly an hour closeted with his caucus and Speaker Barbara Buckley in Assemblyman Tom Grady’s office. In the end, the best Buckley, D-Las Vegas, could manage was a compromise to put $100,000 into starting the foreclosure support system with the promise that the finance committee would reconsider adding more money at the first of the year.
“That at least gets something started,” she said after the final vote.
Michele Johnson, director of Consumer Credit Counseling Service – the federally certified nonprofit which would provide the actual credit counselors – said the challenge will be hiring four counselors when they’re really only guaranteed a job for the next two to six months. She said to attract qualified people, it takes a salary of about $40,000.
Four counselors is far fewer than the 10 positions originally proposed. According to statistics, there are nearly 5,000 homeowners facing foreclosure each month and next year, there will be some 15,000 adjustable-rate mortgages raising their interest rates each month. Nevada has had the nation’s highest foreclosure rate for a full year.
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The problem, according to Johnson and Business and Industry Department Director Mendy Elliott, is going to get worse, not better.
Buckley’s original motion called for $375,000 from the Mortgage Lending Division’s $4.6 million reserve account plus $25,000 already promised in private contributions to set up the 800-number, hire counselors and advertise so people know the service is there.
She said as head of Clark County’s legal services nonprofit, she has been “seeing the ravages” of the foreclosure crisis for most of a year.
“In the bankruptcy classes we offer every week, now over half the people are in foreclosure,” she said. “There are so many people out there who need help.”
And she said too many of them are being lured to shady businesses which promise help but are actually scams.
Cegavske said the state doesn’t need thousands of dollars to create an 800-number for people to call, that they can call the existing 211 number for help. But Elliott and Johnson said the people at 211 can only refer people to someone who can help, that they can’t provide the service because they aren’t trained credit counselors.
Beers said the proposal originally presented by Assemblyman Marcus Conklin, D-Las Vegas, “is not well put together.”
“We don’t feel that there is sufficient information available to us,” said Raggio after the closed-door meeting.
He said they want data on how much the system has accomplished, utilization of the 211 line at the January meeting to justify the rest of the funding.
Elliott’s staff will set up and monitor the program, which will be operated by the credit counseling service.
• Contact reporter Geoff Dornan at email@example.com or 687-8750.
At a glance
Consumer Credit Counseling Service may be reached at 329-0841;
Consumer Credit Counseling Service of Northern Nevada at 322-6557;
Credit Affiliates at 337-6363.