Assembly Bill 284 (AB284) is a bill passed by the Nevada Legislature in 2011 that forces banks to prove they have the legal right to foreclose on a particular home. The most controversial piece of the assembly bill requires bank workers to sign an affidavit that they have “personal knowledge” of a property’s document history from conception or they will face criminal penalties. The “personal knowledge” verbiage brought legitimate foreclosures to a stand-still in the State of Nevada.
The “personal knowledge” verbiage in AB284 has created a shortage of homes for buyers which has created a boost in housing prices in many markets around the state. Recent appreciation in Las Vegas has been at a rate of 2% a month. At the same time, AB284 has increased the volume of “shadow inventory.” "Shadow inventory” is considered a mortgage that is more than 90 days delinquent. That number has grown to over 100,000 homes according to many housing analysts who follow the State of Nevada’s real estate industry.
Attorney General Catherine Cortez-Masto has created a task force involving the state’s largest lenders, title representatives, realtors and government officials to discuss possible changes to AB284 in this legislative session in Carson City. Cortez-Masto and all parties involved are very clear that they don’t want to repeal AB284 but clarify the terms like “personal knowledge” and “business knowledge” so that banks and their employees can foreclose on the “shadow inventory.” The proposed amendments to AB284 will also identify legitimate sources through which the lenders can validate document history. Many feel amending AB284 as proposed would allow the bank to foreclosure on the "shadow inventory" and stabilize out the current accelerated appreciation the state is experiencing in home values.