A new report by the Nevada Association of Realtors contains recommendations to the state legislature for amendments to the anti-robosigning law.
The law, known as AB 284, has been widely blamed by detractors for creating a residential real estate shortage, because it made lenders reluctant to foreclose on seriously delinquent mortgages. Those are mortgages that are 90 days or more delinquent.
Keith Lynam, legislative chairman of the NAR, says the negative effect of AB 284 has been overstated, but is recommending a language change that would relieve lenders of the “personal knowledge” requirement. The provision holds banking executives personally responsible for tracking the history of a mortgage before they foreclose. The association says corporate knowledge should be sufficient.
The package includes protections for the buyers foreclosed property, too. The association is asking for a bona fide purchaser statute, which would create an assurance for buyers that a foreclosed property owner will not show up at the front door some day demanding his home back, Lynam told KXNT.
The Realors also want the legislature to write clear definitions to distinguish vacant homes, where the homeowner is still involved in the disposition of the property, and abandoned homes, where the homeowner has disappeared. Identifying the abandoned homes will help get them listed more quickly and will normalize the market, he said.
The entire report and recommendations are available here.