As of June 1, 2013 Nevada passed AB300 designed to solve some of the problems caused by AB284.
AB284 was designed to set up rules for the banks to follow when foreclosing on a property. If you remember the robo-signing scandal where banks were illegally foreclosing on properties without all the proper documentation. They were afraid that would lead to crazy law suits were a family thinking they purchased a house in good standing to then be kicked out so the original owner could have it back.
A huge potential legal and social mess.
The bad part of AB284 is that banks were afraid to foreclose on these homes because they could face large fines and legal fees. So they didn't. In the short run it had a positive affect on the market, low supply and increasing demand led to increasing prices. Now it's being viewed as the reason you look around your neighborhood and there's that house that has been sitting vacant for a couple of years now.
This is what they referred to as the "Shadow Inventory".
AB300 is now trying to set up new guidelines for the banks to follow to avoid all the issues previously stated.
Many people are concerned that this is going to cause the banks to flood the market with this extra inventory and lead to another "crash".
I don't think so. The banks have never done anything at a fast pace. We would be lucky to see an extra 1,000 a month released on the market. With the current demand, that would have almost no affect.
In my opinion, I think people have become cynical. Over the past 6 years we have had so much bad news, and now people just expect more. The worst is behind us.
