Assembly Bill 300 (AB 300) Recently Passed by Nevada
AB 300 is Assembly Bill 300, which was recently passed by the state of Nevada – a law that allows banks to foreclose all defaulted loans in the state. This will allow more foreclosures and replenish our declined inventory. It also allows banks to bypass the previous Assembly Bill 284 (AB 284), which was passed couple of years ago. It prevented banks from foreclosing homes until they had the proper paperwork. It required the lien holder to submit an affidavit stating his personal knowledge of the loan. Obviously, that was very difficult for the banks to prove and it slowed down the process of foreclosure. Besides that, effective foreclosure as per state law could not be done.
Now, since AB 300 allows banks to foreclose homes, this will make it very easy for them to foreclose all the defaulted liens. It is great news for the banks and the consumers as well. It will allow us to normalize the market for the time being and stimulate the economy of the state. However, I believe that the foreclosures and short sales are here to stay for a foreseeable future. It will be the norm of the housing market. There are thousands of homeowners still underwater and not able to make mortgage payments based on the current income.
Furthermore, once the adjustable loans go into effect in 2016, I think short sale homes will increase in volume as well. In my personal opinion, it is a fact that short sales will be here for most of this decade. AB 300 will help us get more homes on the market, but at the same time, there are more defaulted loans being recorded at the county recorder’s office. It is going to be a very challenging time for the next few years for the home sellers and the industry experts.