The State of Nevada is considering a recommendation of a state senate subcommittee to end the state’s foreclosure mediation program. The recommendation is based on reports of economic recovery including a much more stable and robust housing market than when the program was begun at the height of the economic downturn of a few years ago. The committee also cited a lower number of participants.
The program assisted more than 7,500 homeowners in 2011, but participation has dropped steadily, and a report ordered by the committee predicts fewer than 1,000 participants by the year 2017. Additionally, the committee cited diminishing effectiveness, with participants retaining ownership of their home dropping below 20% and expected to continue to drop. This is believed to be the result of fewer truly qualified participants entering the program, which is not designed as an alternative to bankruptcy or other financial relief.
The program costs about $3 million annually, which is a price tag many in the state government believe is too high for a program that may only be helping a handful of citizens in years to come.
Not everyone in the government shares this view, however, with some democrats pointing out that nearly 300,000 homes in Nevada remain “underwater,” meaning that the home’s value is far less than the amount owed on the mortgage, trapping owners in their home because they cannot sell it for a price that will settle their debt and also unable to effectively re-finance the property.