CARSON CITY — A state legislative panel has approved using $11.7 million to set up a resource network for Nevadans trying to access $25 billion available nationwide for mortgage assistance.
Funding will be used for public outreach and to provide struggling homeowners with access to counselors and legal aide support, state Attorney General Catherine Cortez Masto told the Interim Finance Committee on Thursday.
Money for the program comes from $57 million Nevada received from five of the nation’s largest banks as part of the national foreclosure settlement. The state also negotiated a separate $30 million settlement with Bank of America.
The banks pledged $25 billion nationwide to help homeowners facing foreclosure with principal reduction on their loans and other assistance.
Legislative committee members unanimously approved the $11.7 million expenditure to finance the first year, but said funding for another two years would be taken up during the 2013 legislative session, which begins in February.
Masto said it was important to get the program up and running because the pot of money is available on a first-come, first-served basis.
The Lied Institute for Real Estate Studies at the University of Nevada, Las Vegas estimates there were 100,000 foreclosures since 2007 in southern Nevada. Statewide, more than half of homes are underwater, meaning owners owe more than their houses are worth.
Nationwide, authorities say about 11 million households are underwater.
The settlement requires the banks to reduce loans for about 1 million households at risk of foreclosure. The lenders will also send $2,000 each to about 750,000 Americans who were improperly foreclosed upon from 2008 through 2011. The banks have three years to fulfill terms of the deal reached in February.