SB 321 proposed in NV....thoughts?

Question

It is my understanding that this proposed bill is very similar to a bill already passed in CA. I am interested in hearing your guys thoughts on the impact of this bill should it be enacted.

It was proposed 3/18/13.

Jesse Tsai · Answer

I haven't had a chance to read it in its entirety yet. I read the op-ed about it in the RJ this morning, and my thoughts aren't exactly positive. Here it is if you want to read it. http://www.leg.state.nv.us/Session/77th2013/Bills/SB/SB321.pdf

Robert Adams · Answer

Jesse have you found anywhere they define the "personal knowledge" clause? Have you spoken to Hubble Smith from the review journal? He contacted me about ab300 and specifically the proposed amendments to the "personal knowledge" clause. I emailed him and included a link to this thread.

Jesse Tsai · Answer

Another one got introduced, and this is probably the best RE related one so far. SB 300 - Essentially, the person signing the affidavit for the NOD can rely on information in their business records, information from the recorder, or from a TSG, rather than having to attest to their "personal knowledge" of the loan. http://leg.state.nv.us/Session/77th2013/Reports/history.cfm?ID=673

Robert Adams · Answer

Jesse Tsai Thanks for the response. I will look into those other bills you have mentioned also. Phillip Dwyer prices are going up so fast right now I don't think they need an additional bill to sway appraisals. Sounds like greedy builders to me too. We need to return to a free market with healthy growth and appreciation. Here are some of my additional thoughts: Making everyone feel warm and fuzzy with price increases when we are holding back inventory is not a true solution to the problem at hand. It has sparked a high demand in buyers which is great, but we need to let that demand buy up the existing inventory now and not allow new home builder lobbyist to push bills through that will continue to hold up this inventory and allow new homes to be built and add to the inventory problem. There are currently an estimated 75,000 homeowners in default in the valley and bills like these will hold that inventory back and let it bubble more. Eventually, they have to release these homes. Do they really want vacant homes or default homes sitting forever? No, they will eventually hit the market. And when they do the market will soften. It is better to let them hit the market now while prices are still relatively low and demand is high. This will allow the market to absorb majority of these homes and minimize the softening of the market. If they continue to let the untouchable inventory grow and prices to go up, then whenever they finally decide to release it the demand will be lower due to higher prices and the supply that needs to be absorbed will also be much greater. Not to mention all the new homes builders will have built in the meantime to take advantage of the temporary and artificial inventory shortage. Thank you for everyone's input on these matters.

Jesse Tsai · Answer

I still haven't had a chance to read any of these, honestly, I don't think I will until they pass committee, but did find some other interesting legislation: SB 278 offers an expedited method of exercising the power of sale clause on abandoned properties. Looks good on the surface, but haven't read though the other 15 or so pages yet SB 493 add a few more procedures to being a private lender. Didn't notice anything too overreaching. SB 332- I didn't get the full understanding of it from the digest, but its got something to do with abandoned properties in foreclosure, and having to record and post an affidavit if a property is determined to be abandoned Phillip Dwyer I think you are referring to AB 204. I actually read this one since its only a page long. I do agree that it appears that some lobbyists helped out on this bill, as I think the sole purpose of it is to artificially increase property values by excluding distressed sales as comps. One concern I have is finding out what the definition of a "foreclosure sale" means. From reading the statute, (NRS 40.462 section 4) I believe the definition of a "foreclosure sale" includes REO, though it is a bit vague. The bill also excludes "sale in lieu of foreclosures" as comps, which is a really fancy word for short sales. Excluding those two groups effectively excludes about 50% of all the sold comps in the Las Vegas area from appraisers (4958 of 9748 of all sales in the last 90 days fall into those two categories), and effectively excludes the lowest 50% of comps. While I don't mind in the short term, as it'll help further artificially increase the value of my properties, I'm not a fan of manipulated markets that has favors certain groups. Also, there's a whole assortment of bills floating around on NRS 645, which may be of interest to Robert Adams and Phillip, as well as any other Nevada Realtors.

Phillip Dwyer · Answer

There's also been legislation introduced that will dictate what comps an appraiser uses. This smells like builders too.

Robert Adams · Answer

I was expecting a lot more responses on this from my fellow investors, brokers, and agents from Las Vegas, Nevada on this. Here are MY THOUGHTS on the matter: We need to return to a free market in order to balance out inventory and have a true recovery. Prices are artificially rising because ab 284 has artificially decreased supply (inventory). Right now demand is so high it would absorb most of the new inventory should ab 284 get amended. By creating another bill like sb 321 it is going to keep inventory low artificially and create opportunity for new home builders to build more new homes. We don't need more new homes. We need the ability to sell the existing default homes. By manipulating the supply like this bill proposes we will only be adding to the supply when in reality we need to be working on selling the existing supply that is untouchable currently. When will politicians learn that more regulations and restrictions are only making things worse. Last year some neighborhoods appreciated as high as 30%! That is unhealthy growth that we have not seen since the bubble. Leave sb 321 as is and amend ab 284 and release the inventory so we can actually recover!

Robert Adams · Answer

http://www.leg.state.nv.us/Session/77th2013/Reports/history.cfm?ID=772 Jesse I read all 28 pages and it doesn't look good to me either. In fact the only people it looks good for is new home builders. I'm actually in CA right now on vacation with my family so I didn't see the lvrj today but I will check it out.

Bill Gulley · Answer

Have a link?