Gibbons Says Education, Not Rules Needed To Fight NV Foreclosures

Nevada's housing market is not in a "crisis" and does not warrant increased regulation of the mortgage lending or real estate industry, Gov. Jim Gibbons said Thursday.

"It's not at crisis proportions today but it has the ability to cause problems for us down the road," Gibbons said after a private meeting with executives for several major lenders in the state.

"I'm convinced that the way out of this is addressing each individual problem, one loan at a time."

The meeting, dubbed an Economic Summit on Housing Stability, was
closed to the public to encourage "honest and frank conversation," the governor's office said.

Gibbons, a Republican, emerged from the meeting with a promise to try to improve borrower education. He said the state would produce a public service announcement and create a Web site intended to link people facing foreclosure with counseling services and lender contacts.

After years of skyrocketing home values and speculation, Nevada sits near the top of most foreclosure rankings.

About 40 homes go into foreclosure every day in southern Nevada, the governor's office said.

That's one for every 165 households in the state, triple the national average.

The source of the problem for thousands of Nevadans is loans with adjustable interest rates that have reset or are scheduled to reset to levels homeowners can't afford.

Gibbons said he saw the problem as largely a matter of borrowers taking on loans they should not have sought. He said he did not believe the state should intervene with funding assistance or restrictions on loan products or limits on the way they are marketed.

"Not everybody is going to be able to be saved in this," he told reporters.

Gibbons stressed that borrowers facing foreclosure may have options and should contact their lenders.

He said he received promises from bankers that they would look at modifying the terms of some loans to accommodate strapped borrowers.

But Gibbons said lenders told him their ability to make such changes was limited.

The governor said he was considering increased regulation of what he called "foreclosure fraud scams," and promised to convene another economic summit with real estate agents, contractors and nonprofit groups soon.

He also planned to create a task force to continue researching the problem.