Proposed Bill Deprives Las Vegas Mortgage Lenders of their Rights

The Nevada Legislature is discussing a proposed law that would eliminate liability for many residential loans after a shortsale or foreclosure on primary residences (not Las Vegas investment properties). Not a horrendous idea, and one already in effect in a couple of states. But this proposed bill deprives Las Vegas mortgage lenders of their rights!

The problem with the Nevada version is that this proposal would be retroactive! This means that residential loans on primary residences that were written a year, ten years or even twenty years ago would be affected, and the lender would not be able to pursue a deficiency judgment against the borrower even though that was part of "the deal" in the original contract.

This is a truly horrendous precedent. (Not to mention that in actual fact very few lenders ever pursue a deficiency judgment and very few people would actually benefit from this law.) The crucial point is: this law changing the terms of a contract that was entered into in good faith by both parties to the detriment of one of those parties. It is one thing to change the law to read that mortgage lenders do not have the right to pursue a deficiency judgment on loans written for personal residences in the future AFTER the bill is passed. But it is quite another to make such a bill retroactive. This deprives the lender of their ability to collect on a loan that was already granted on terms agreed to by both the lender and the borrower. The lender made the decision to lend based on those terms.

No one feels more for the families affected by the recent Las Vegas real estate bust - I deal with absolutely heartbreaking stories every day. I have sat down and cried with distressed homeowners at the kitchen table too many times to count. And I also own properties that are shockingly upside down in value myself. But to negate one of the basic terms of a contract because the economy is bad and deprive one of the parties to that contract of their legal rights after the fact is not good business in any economy.

In the future, this could apply to any contract. What if the courts should decide that just because you decide to stop making payments on your car, the lender is not entitled to repossess it because it is your only means of transportation to work? The auto industry would come to a screeching halt. Thousands would be laid off and prices on new cars would skyrocket. You have tenants in Las Vegas homes that can't pay their rent. But you can't evict them because they just passed a law that lets them stay rent free. No one would buy rental properties, the real estate market would plunge further and again thousands would be laid off in the construction industries. Your employer has a contract with you stating they will give you certain benefits, say a matching contribution for a 401k. But now a new law is passed saying that retroactively they can take back those benefits because the economy is poor and they "need" the money to stay in business. There goes your retirement.

It is just dangerous to make retroactive changes to a contract to the detriment of one of the parties who entered into that contract in good faith. Business can't stay in business that way. You might be on the "right" side of the law this time if you are facing foreclosure in Las Vegas, but tomorrow you could easily find yourself on the "wrong" side. This kind of thinking undermines the principles on which our entire country was founded.

SB 346 has to make it out of Senate Judiciary Committee to get a vote on the Senate Floor. The deadline is Friday April 15, 2011 for the bill to pass out of the committee, otherwise it just goes away. Please contact the members of the Judiciary Committee below and tell them to vote NO to SB 346, and do it today!

• Valerie Wiener – Chair – vwiener@sen.state.nv.us
• Allison Copening – Vice Chair - acopening@sen.state.nv.us
• Shirley A. Breeden – sbreeden@sen.state.nv.us
• Ruben J. Kihuen – rkihuen@sen.state.nv.us
• Mike McGinness – mmcginness@sen.state.nv.us
• Don Gustavson – dgustavson@sen.state.nv.us
• Michael Roberson – mroberson@sen.state.nv.us

And once you have contacted the Senate Judiciary Committee, forward this post to all your friends so they can do the same. This law is NOT in the best interests of any Nevadan!

Las Vegas Real Estate IS a Depressed Market, But...

Yes, Las Vegas real estate IS a depressed market, but is it truly a buyer’s market? That’s the $64 Million Dollar Question.

The answer is yes and no. Las Vegas is not necessarily a buyer's market, even though it is a very depressed market. At certain price points the market definitely favors the buyers, but in the lower ranges, under $250k, you are in the seller’s ballpark. In other words, lower end properties are already so undervalued that there is stiff competition to purchase. You can’t reasonably expect to low ball something that is already so low that there are multiple offers on it. And yet many buyers make below list price offers (against the advice of their agents) and are angry when they don't get a bid.

Inventory levels have remained steady for the past six months and all cash sales account for over 50% of purchases. Investors are buying Las Vegas because the prices are so low they receive a great return on rental income. So under $250k the competition is fierce. Most Las Vegas foreclosures and short sales are actually selling for MORE than list price as there are multiple offers from these cash investors. Yet even above list price these are great deals FAR below replacement cost and with great rent yields.

But if you are truly looking for more bang for the buck, think about the Las Vegas homes for sale in the higher price ranges. The higher the price point, the more open sellers are to negotiation. There are fewer offers to choose from (unless the property is grossly underpriced which happens often on the short sale listings). Bank foreclosures are much more willing to deal and “real sellers” tend to have more equity. If they have been sitting on their homes for a few years and finally get to the point where they have to move, a real seller can be just as good of a deal as a foreclosure. Plus they come with warranties and are in generally better shape, which makes them less costly in the long run.

Las Vegas Real Estate Now Being Featured on Thumbtack.com!

Las Vegas Real Estate is now being featured on Thumbtack.com! Our company was contacted by the all new website, Thumbtack.com to be one of their featured Las Vegas real estate sites! It is always nice to be recognized by outside service providers for doing a great job, and we are excited about the extra promotional opportunities this will afford us to market our listings.

Speaking of new listings, we have a dandy in Green Valley Ranch! It’s a beautiful and immaculate 1769 sf 3 bedroom 2.5 bath townhome in a guard gated community across from the fabulous Green Valley District. This will go fast, so check it out at: Green Valley Town Home