Spencer Judd and James Fitzgerald are nervous.

Judd, who owns Home Funds Mortgage in Las Vegas, and Fitzgerald, who owns Nevada Loan Source in Carson City, operate out of their respective homes. Both claim that recent moves by Nevada Mortgage Lending Commissioner Scott Bice could make such home-based lending businesses extinct.

Since assuming the top spot at the newly created Mortgage Lending Division late last year, Bice has embarked on a controversial effort to refine the industry's regulations.

He indicated that the elimination of home-based lenders is part of an effort to polish the industry's image.

"The basic gist is to create a professional industry," Bice said.

His original package of proposed rules included language restricting mortgage brokerage operations to land zoned for commercial operations. In the latest version revised by the Legislative Counsel Bureau, that language had been removed. The problem for the home-based lenders is that an additional provision mandating formal signage at all mortgage brokerages remains.

That clause calls for a sign "visible from the nearest public sidewalk, street or highway." Judd, a Summerlin resident, said such a sign has no chance of approval from his neighborhood association. Fitzgerald said his neighborhood also would frown on such signs.

"They won't let me do that, and I wouldn't want to do it anyway," he said.

Bice is well aware of the effect.

"In most cases, that signage is just not possible," he said.

Based on industry average figures, Fitzgerald said, there could be as many as 70 such lenders in Nevada. Bice, however, estimated that there are between eight and 15 in the state. Judd and Fitzgerald said they know of only one other home-based mortgage lender operating in rural northern Nevada.

Bice said the elimination of the zoning provision would allow those rural lenders to continue to operate.

The final language of the new regulations could be decided at a hearing later this month. While the lenders said they have been pressing lawmakers for some relief, the future is uncertain.

"After 15 years, it would put me out of business," Fitzgerald said. He and his Las Vegas counterpart both said they have been free of any regulatory complaints.

Fitzgerald said he opened his office to provide discrete mortgage services for high-profile clients, seeking to do business in a more private setting.

"My business has always been people who don't want a lot of eyes on their loan files -- attorneys, entertainers," he said.

Judd said working from home has allowed him to spend more time with his eight children while going to law school. Both said the additional overhead of establishing a formal office would force them to charge higher rates and damage their competitiveness.

"There's no need for me to have commercial space to do the business I am transacting," he said. "From what I need to do personally in my life ... I can't afford what it would cost. It defeats the purpose of what this business was designed to do."

He also said the push to eliminate such businesses flies in the face of a national trend toward e-commerce and telecommuting.

Bice disputed that claim, saying that nothing in the new regulations would prevent lenders from doing some work from home, just that a formal office also be kept.

The office, he said, allows consumers a clear understanding of the nature of the business. Bice also expressed concerns over sending his regulatory staff into potentially unsafe situations at someone's home office.

He said that while most examinations go smoothly, some cases get aggressive when possible problems are brought up.

"I just don't think it's right to send an employee into a situation like that," he said.

Article © Anywhere Communications All Rights Reserved