Nevada’s Foreclosure Mediation Program Set to End

In 2009, the Nevada Legislature launched a foreclosure mediation program in response to an ongoing housing crisis during which many homeowners across the state unexpectedly found that they owed more than their home was worth.  The program requires banks to participate in mediation with struggling homeowners regarding a potential loan modification prior to initiating foreclosure proceedings.  During the program’s first year, mediators reportedly prepared over 6,000 cases and assisted almost 2,000 homeowners in avoiding foreclosure.  In the last fiscal year, however, less than 1,800 cases were prepared and only about 250 Nevada homeowners successfully secured a loan modification.

At this time, the Nevada foreclosure mediation program is scheduled to officially terminate at the end of June and the legislatively mandated final application deadline is December 31, 2016.  Still, some Nevada lawmakers would like to extend the foreclosure mediation program during the upcoming spring legislative session.  Others believe the dwindling number of foreclosure mediation requests do not merit the costs associated with the program.

Currently, Nevada leads the nation in underwater homes.  Despite significant improvements since the peak of the housing crisis, approximately 14 percent of Nevada homeowners still owe more than their property is worth.  In 2010, that number was closer to 66 percent.  Although homeowners must pay a $200 fee to initiate mediation proceedings, the bulk of the program is funded by the state.  It will be interesting to see whether the foreclosure mediation program is successfully extended.

You may read more about Nevada’s foreclosure mediation program in a previous blog post.

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