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Kate Lang
Professor Cathy Mestre
Real Property II – PLA 2612
24 February 2015
Owning Your Own Home, the American Nightmare
In 2006 life was good. The economy swelled. The banks were rushing to construct
newer and more creative lending practices which allowed the dream of owning a home to
become a reality for many Americans that previously couldn’t qualify for a home loan. The
wave of higher home prices and lower interest rates seemed like they would never end. Then, in
2007, there was a crack in the economy. The R word, “Recession”, started getting thrown
around. Then another crack and the lenders started selling off their high risk loans. Another
crack and housing prices start to tumble, people lose their jobs and many are left with mortgages
they can no longer afford. The housing bubble bursts and a flood of foreclosures hit the courts.
Crisis. Confusion. Change. These are just some of the words being used to describe the
current situation in many of the court systems in the states that were hardest hit by “The Housing
Bubble.” According to www.investopedia.com the definition of the Housing Bubble is as
follows: “A run-up in housing prices fueled by demand, speculation and the belief that recent
history is an infallible forecast of the future… At some point, demand… stagnates at the same
time supply increases, resulting in a sharp drop in prices – and the bubble bursts.” This bursting
of the bubble and the subsequent flood of foreclosures is what has been the cause of much of the
confusion, change and crisis within several states court systems.
The problem with floods is that even with the best warning systems there is little that can
be done to stop them. The best course of action is to monitor the situation, report the findings
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and pick up the pieces when the crisis has passed. All of this is true even when the influx is
lawsuits and not water. States like Nevada, Florida, California and many others have come to
learn this firsthand, however each state has had its own ideas on what is the best way to clean up
the foreclosure backlog.
In 2010 in an effort to halt scores of new foreclosure cases hitting the dockets Nevada
took advantage of monies provided by the U.S. Treasury called the Hardest Hit Fund. This fund
overseen by the Nevada Affordable Housing Assistance Corporation (NAHAC) was developed to
help homeowners that were the most likely to default on their loans and wind up in foreclosure.
At risk homeowners were offered mortgage assistance in the form of “up to a maximum of
$1,000 monthly toward their first mortgage payment, including principal, interest, property taxes,
and insurance for up to nine (9) months” or a reinstatement option which “pa[id] up to a
