Under the law, distressed homebuyers who are in default are allowed to request for mandatory mediation hearings with their lenders. Courts will provide the forms that will be used for the mediation hearing.

Mediators would be appointed by courts to conduct hearings to help troubled homeowners have new home loan arrangements that would give them affordable payment terms and allow them to remain in their homes. However, under the law, mortgage lenders? consent or agreement is not required to make affordable loan arrangements for homebuyers.

But in some cases, especially in transactions that require the selling of a bank REO properties that is below the total mortgage owed by homeowners, lenders? consent are highly needed.

The flood of foreclosure properties in Nevada has caused real estate prices to drop drastically. In 2008, about 77,000 properties were foreclosed and the first quarter of this year saw 41,296 properties receiving foreclosure filings, representing a 19 percent jump from the last quarter of 2008 and 111 percent rise from the first quarter the previous year.

Buckley explained that the law is not designed to help every resident who is under financial distress. She pointed out that if an individual lost his job, the law is not going to help him find a new job. However, she added that the law will help people afford a mortgage, but not at the current rate.

The rules for mediators will be established by the Nevada Supreme Court the moment Gibbons signed the bill into law. The court will also create the necessary forms for homebuyers who want to request for mediation. It will also be responsible for naming people who will serve as administrators for mediation in each Nevada county.

According to Chief Justice James Hardesty, over 22 senior judges and 300 lawyers have already designated their intention to serve as administrators for mediation. Each mediator would be paid up to $400 for conducting mediation hearings. The total amount to be paid to the mediator will be shouldered equally by the homeowner and lender.

The bill that will help prevent bank REO properties in Nevada will take effect on July 1, 2009.