Subcommittee recommends ending Nevada’s Foreclosure Mediation Program
CARSON CITY — A joint money subcommittee Wednesday recommended shutting down Nevada’s Foreclosure Mediation Program, citing a recovering housing market and fewer participants than at the height of the recession when the program was established.
Overseen by the Nevada Supreme Court, the Foreclosure Mediation Program was created by the Legislature in 2009 as the state’s economy tanked and the housing market collapsed.
According to statistics presented during Wednesday’s hearing, completed mediations have declined from a high of 7,558 in the 2011 fiscal year to a projected low of 662 in 2017.
Effectiveness is also waning. In 2010, 40 percent of homeowners who went through the program retained their homes. Projections estimate 15 percent by the end of the upcoming fiscal year.
Assemblyman Randy Kirner, R-Reno, said if the trend and projections hold, it would mean only about 100 people would benefit two years from now under a program that costs about $3 million to operate.
“We’ve turned the corner on this one, and it’s time to move away from here and do something better with our money,” Kirner said.
Democrats on the money panels argued that while Nevada’s economy is improving, the housing market has not fully recovered. Assemblywoman Heidi Swank, D-Las Vegas, said 282,000 homes in Nevada are still underwater, where people owe more than their homes are worth.
“We are not out of the woods yet,” she said.
Swank, Assemblywoman Irene Bustamante Adams, D-Las Vegas, and state Sen. Joyce Woodhouse, D-Las Vegas, suggested leaving the program intact and reviewing it again in two years.
“We are approaching the tail end,” Bustamante Adams said. “My hope would be that we see this through the next biennium and then wean ourselves off.”
But Republicans who control the Senate and Assembly said the state has other more pressing demands.
“According to the statistics, we’ve actually passed the point of diminishing returns on this program,” said Assemblyman Chris Edward, R-Las Vegas.
The program is supported by fees, with most coming from a $45 fee attached to filings of notices of default. A $400 mediation service fee also is assessed per case.
In 2010, the program collected $7 million in fees, but the revenues dwindled to $1 million last year.
Contact Sandra Chereb at schereb@reviewjournal.com or 775-687-3901. Find her on Twitter: @SandraChereb
