Opinion ID: 2525030
Heading Depth: 1
Heading Rank: 6

Heading: Scope of the provision

Text: The statute does not unequivocally indicate that it was designed to protect lenders other than those whom the dealer contacts directly. We conclude, however, that the Legislature intended to protect all lenders involved with the mobile and manufactured home market, including those aware of a document's falsity. The Division points to language in NRS 489.401(7) prohibiting certain representations to any lender as evincing the Legislature's intent to protect the entire mobile and manufactured housing and lending industry. At the hearing, the Division introduced expert testimony illustrating that the misstatement of a dealer rebate as an actual cash down payment renders the entire transaction suspect because most contracts are ultimately sold to third parties on the secondary market. According to Spencer Judd, Regional Manager for BankAmerica Housing Services, interest rate and credit standards differ based on the tendered down payment amount. Judd testified that when a customer has actual equity in a home, the customer's potential for repayment is improved. In his opinion, loans based on inaccurate information, and loans made in connection with nominal cash down payments, are subject to higher than average default rates. When misrepresented down payments create increased lender losses, that lender raises the interest rate on future loans in anticipation of additional losses and collection costs. Judd further testified that loan contracts are sold or assigned into the secondary market based, in part, on the actual amount the home purchaser paid toward the total cost. The purpose of NRS 489.401(7) is to protect the integrity of the entire mobile and manufactured home lending system by facilitating trustworthiness, full disclosure of accurate information, and fair dealing between dealers and all financing entities. NRS 489.401(7) is designed to protect lenders, guarantors, and any other interested party or intermediary involved in the mobile and manufactured home industry. Thus, the statute's scope includes those entities directly involved in a transaction, as well as entities that may be affected indirectly.