New Nevada Law Slows Foreclosure Process: Is Florida Next?

Nevada recently passed legislation that reduced foreclosures by up to 88%, making it harder for banks to foreclose by focusing on technicalities rather than the underlying obligation. What would the impact of similar law be on Florida’s housing market? This would definitively slow any hope of recovery and prove harmful to neighborhoods across Florida. Not only does a law like this ignore the on the ground asset management aspect of real estate that makes a neighborhood great or terrible to live in, it also forgets who the at fault party is to begin with.

Regardless of which side of the foreclosure argument you are on, the idea of not foreclosing on owners that have not paid for their properties ignores that fact that many of these properties are abandoned, creating a hazard with homes containing squatters, unsafe pools, overgrown lawns and landscaping creating pest infestations; not to mention the further erosion of the property’s value as it sits longer and longer with no one to care for it.

It's troublesome enough that our market is full of thousands of bank owned homes that are neither rented nor available for resale. At least these homes are asset managed and there is someone, even if they are some corporate drone in a faraway land, that will eventually address a concern on the property. Imagine if the banks didn’t foreclose? What would happen to these properties? Who would be doing what in the house next door? Who would you call to “deal with it” when you see something troubling? Certainly not the property owner. If they cared, the home would not be in that condition to begin with.

Even more concerning is the fact that society seems to be losing all sight of once strong core values of personal responsibility and self-reliance. Is a paperwork error worse than not fulfilling your obvious obligations? How would society run if the fine print on everything became the main issue at hand rather than the sum of the circumstances. Paperwork aside, someone borrowed money and pledged real estate as collateral. We, as a society shouldn’t care nearly as much about who signed what form as we do about whether the obligation was met under the basic terms of the agreement.

A technicality should never trump the core of an issue. It’s as if we are all being fooled by sleight of hand while the real issue is ignored.  This issue is marred with concern for where the people and families will go “if they are foreclosed on” I’m 100% confident that there is rental housing available in spades in every foreclosure market in the country. It may not be the same quality as the home left behind, but then shouldn’t we be adjusting our expectations to match our means? It’s hard to beat a free luxury home to live in. By contrast, all other options look less attractive.

Let’s not forget that many of these borrowers rent their homes for profit while the bank take a loss! Just the other day we had an objection filed to a sale where the borrower is vacation renting the property for $3-4k per week while not paying the bank a dime toward their mortgage (no payments for over two years). Then they have the audacity to object to the foreclosure after it was canceled three times on technicalities while they try to negotiate a principle reduction in their loan! Is it right to profit from an asset you don’t pay for while tax payers bail out the debt at the bond holder level? Just like boasting about owning 15 homes using NINJA loans became commonly overheard talk in SWFL during the boom, it’s now just as common to hear people gloat about how much money they are making off this broken system and yet we continue to legislate further away from accountability and responsibility.

Let’s hope this legislation, and all like it, stay with the decent folks in NV, long known for their state wide high morals and ethical standards. If not, I can’t imagine why anyone would want to extend credit or capital to anyone else. We blame banks for these loans to begin with. Now we  blame banks for not lending. Honestly,  when you see legislation like this, can you blame them?
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