Assemblyman feels pinch of real estate market slump

By Jeff German

Wednesday, April 29, 2009 | 2 a.m.

Las Vegas Assemblyman Morse Arberry, longtime chairman of one of the Legislature’s influential money committees, is going to court to try to stop foreclosures on two of his rental properties and pushing for state laws that would address situations like his.

The Las Vegas Democrat, first elected in 1984, said the lawsuit is part of his efforts to stay afloat in tough economic times.

He said the declining real estate market has forced him to downsize his own Canyon Lake Mortgage company and that he has been experiencing financial troubles like many Nevadans.

The Nevada secretary of state’s office has declared his company in default because it hasn’t submitted its annual list of officers and accompanying fees for 2008. If the list and fees, which total $200, aren’t submitted by June 30, the company’s license to operate in the state will be revoked, officials said.

“I’m just trying to hang on to what I’ve got,” Arberry said. “I’m not above what everybody else is going through. I have problems too.”

Amid his troubles, Arberry introduced Assembly Bill 452 in March, a measure that would have extended the time before a foreclosed property could be taken over.

Arberry said a lawyer asked him to sponsor the bill, but it died in the Assembly Judiciary Committee after the lawyer did not provide the committee with requested information.

But another foreclosure bill, sponsored by Assembly Speaker Barbara Buckley, D-Las Vegas, was approved by Arberry’s Ways and Means Committee on Monday, the same day Arberry filed his lawsuit against Countrywide Home Loans.

That bill, AB149, requires lenders to meet with the owner of a property on the verge of foreclosure to try to reach new loan agreements — which is what Arberry sought to do with Countrywide.

“I understand what everybody is going through,” Arberry said.

Arberry’s nine-page lawsuit charges that for the past several months Countrywide, which was bought by Bank of America in 2008, has moved to foreclose on the two homes and “rebuffed” his efforts to try to resolve a dispute over what he owes on the properties.

A Bank of America spokeswoman did not respond to a request for comment.

Arberry’s lawyer, George Kelesis, said the mortgage records he has reviewed show Arberry is “up to date” on his payments.

“What is happening here is what is happening to virtually everyone in this country,” Kelesis said. “The financial institutions are not capable of providing accurate information about their payments so they know where they stand.”

Arberry complained that he has been trying to work out a loan modification with the lending giant, which this week started doing business as Bank of America Home Loans, “but it’s very difficult. Banks just aren’t listening.”

Countrywide has refused to “participate in any resolution that does not involve him paying the full amount” the company says it is owed, the suit alleges.

The suit accuses Countrywide of concealing from Arberry at the time he bought the two homes that real estate prices, largely as the result of policies adopted by the mortgage companies, were artificially inflated and would decline.

Countrywide also concealed from Arberry, the suit alleges, that he would lose all of the equity in the properties once they dropped in value, making it impossible for him to refinance with an affordable mortgage.

And the company’s lending and foreclosure policies, the suit says, doomed his loans to foreclosure.

The suit seeks a temporary restraining order and a preliminary injunction to prohibit Countrywide from moving forward with the foreclosure proceedings against the two homes — one at 2735 Gazing Stars St. in Las Vegas and the other at 2020 Fred Brown Drive in North Las Vegas. Arberry paid $230,000 for the 925-square-foot Gazing Stars home and $255,000 for the 1,548-square-foot Fred Brown home in August 2006, according to the online records of the Clark County Assessor’s Office.

The two homes are among seven properties the assessor’s office says Arberry owns in the valley, including a 6,279-square-foot home at the Canyon Gate Country Club at Sahara Avenue and Durango Drive. He is listed as a co-owner of that property with Virgie Vincent, owner of Sahara Mortgage Corp. The purchase price of the home in June 2006 was $1 million, records show.

A company Arberry and Vincent formed in 1998, Titan Investment Inc., also is in default, online records at the secretary of state’s office show. Titan Investment owes the secretary of state $200 and a list of officers that was supposed to be filed by Dec. 31. The company has until that date this year to submit the fees and the list or face revocation of its corporate license.