Nevada Default Notices Decrease Significantly

When you look at the current real estate market there are a few things that are apparent. First, there is still a high foreclosure inventory, which is great for those considering foreclosure investing. Second, the delinquency rates are still undesirably high throughout much of the country. Third, judicial foreclosure states are taking much longer than state with non-judicial foreclosure processes.

However, how are things going in Nevada?

As foreclosure and delinquency rates rise, Nevada is actually experiencing a significant decline in default notices due to a new state law. Specifically, in September there were 5,360 default notices sent out to homeowners. As of October 25 there were approximately 600 notices sent out throughout the month. Obviously the new state law has definitely had an impact on default notices, which has resulted in a huge decline.

The law, which went into effect on October 1, aims at cracking down on robo-signing in which banks claim to have reviewed cases before sending out default notices. Furthermore, the new Nevada law takes it one step further and will be holding individuals responsible for any false representations they make in regards to titles. In fact, some of the illegal actions that have taken place in Nevada will now be felonies.

Clearly, the new law has forced lenders to at least slow down with sending out default notices as they can be held liable for their faulty actions as of October 1. However, is there really a decline in delinquency or merely a slowing of the paperwork and processing?

The law has threatened to hold individuals liable for their actions, which will definitely slow down the robo-signing that often leads to wrongful foreclosures. Fortunately, this will protect homeowners that have been receiving default notices and entering into the foreclosure process without justification. However, this new law may have the same outcome as judicial foreclosures cases. Although homeowners are giving more protection it may only further prolong the foreclosure process and therefore temporarily hide the true effects.

In the end, Nevada’s law is definitely doing what it is designed to do, which is to make lenders (and individuals) more careful when sending out default notices. Only time will tell whether or not the delinquency rates in Nevada are truly declining or if they are merely being delayed.