LAS VEGAS (KSNV & MyNews3) -- For the first time ever, Nevada homeowners now have a state law to match the federal regulations already in place.
News 3's capitol correspondent Mackenzie Warren is back from Carson City and is helping sort out what added protections this bill of rights brings.
Tara Newberry is in the business of short sales.
There has been a real struggle for homeowners to communicate with the bank,” Newberry said.
As an attorney who specializes in consumer protection: Newberry sees the new Nevada homeowners bill of rights as a checklist they’ve never been equipped with.
“So upfront homeowners’ bill of rights requires certain info to homeowner without them asking for it,” she said.
Then there is the issue of arm's length agreements. Most banks prevent short sales to friends or family.
That's the question lawmakers asked; if the goal is to keep people in their homes Nevada now says short sale buyers can be anybody. Even a family member can rent the home back to you.
Too late, though, for a local couple indicted and charged with bank fraud two weeks ago.
According to the indictment, the couple tried to short sale this home in Henderson to a relative, but lied on their “arm’s length” agreement saying they didn’t know the seller.
If convicted the two could face up to 30 years in prison and pay $1 million in fines. But, under the new “homeowners bill of rights”—what they did would be perfectly legal.
“There's going to be misunderstanding out there,” Newberry said.
Newberry says this couple could now have the right to sell to anyone they wanted. But the fraud charge still sticks:
You can't lie--but you can still sell to mom--right.
“Chances of bank approving it in my experience, the bank is going to say it's denied," Newberry said.
If a family is able to sell a home to someone in their inner circle and keep it, the bank still gets paid--so what's the deal?
“If you're doing a short sale -- and selling to a family member --you are financially gaining from demise of the market,” Newberry said.