Many investors have rode the frenzied market to turn a quick profit.

Beneath the success, however, turbulent market conditions may have left many residents behind, says Gail Burks, chief executive of the Nevada Fair Housing Center. Soaring prices, she said, mean fewer people can afford homes.

Additionally, the pace of the market has created conditions ripe for predatory practices on the part of lenders seeking high costs from buyers desperate to find an affordable home.

Since Burks helped start the center as a part of Nevada Legal Service in 1993 (the center became an independent entity in 1995), access to housing in Southern Nevada has seen a series of victories and setbacks, she said.

"It's been rewarding," Burks said. "You see gains that you make over time in the area of housing and helping people understand their rights. ... Then you see cutbacks in terms of compliance, and sometimes you wonder if you have made as much progress as you hoped."

Burks recently discussed the local housing and mortgage markets with In Business Las Vegas.

Question: Over the past several months, real estate prices have soared. What is this doing to low-income residents of the Las Vegas Valley who are looking for safe, affordable housing?

Answer: Even for those clients who are able to receive some sort of assistance to purchase a home, it's making it very difficult to find a home. Often times they are asked to have all of their paperwork and pre-approval in place. You can do that to a point with different kinds of assistance, but there are always things you can't prepare from an assistance standpoint until there's an offer in and an acceptance and you've gotten in escrow to look at where the pricing and the costs are going to be.

Before the recent auction of 1,900 acres of BLM land in Henderson, the city removed a provision that would have required the developer to include an attainable housing component to benefit working-class residents. What are the implications of this change?

I think we are setting ourselves up for problems. The long-term implication is, for example, will your children be able to afford housing? If so, where? I also think it says something about young couples we might invite professionally to come to the state. Where would they live? Could they afford to live here? Could they afford to work in jobs that perhaps don't start you out at $100,000 a year? If the average cost of a home is $250,000 and it's 1,500 square feet, what does that mean for the average working person?

In a housing market that has been so frenzied and growing so fast, is it realistic to think that market forces can be controlled in an effort to include residents of all income levels?

Building housing that is affordable for people starting out in their lives will take some concessions, whether that's a concession in impact fees, whether that's a concession in terms of other subsidies, you are going to have to have some concessions. The concern we sort of always have on the lending side is, we don't want people to lose money. I think what we're asking is that people not be greedy and perhaps some of that profit be put back into the community we all have to live in.

As interest rates sit poised for a steady trend upward -- combined with rising home prices -- what are the prospects for low-income residents in the housing market?

I think there are things for them. I think we have to be diligent in how we look at what's out there and how those deals are structured. For example, one thing we have been concerned about from a compliance perspective is the new trend to offer interest-only loans. Certainly first-time home buyers receive education and have access to different assistance in terms of looking at what they are buying. But it's sort of like knowing what to do for your car. There's only so much expertise you are going to have going into that deal. So when you give them documents that say interest only and it's not real clear what they are getting, which is actually a rental, I think we are setting ourselves up for failure down the road when those loans become due or have to be refinanced.

The state Mortgage Lending Division Commissioner has expressed concern that as prices and interest rates rise, low-income residents -- particularly those without experience in the lending process -- will be at greater risk of falling victim to unscrupulous lenders. Would you agree?

It's a realistic concern, because that has affected not just low-income people but middle-income people. A good example is you could receive all the education there is to receive ... do the best you can to pick a good lender. But ultimately you have no control over who that loan is sold to. So what happens if it is sold to a bad company? What do you do then? I think the terms in lending we are seeing, the high prices, what's happening overall in the fact that it's a booming market and that everyone wants to be here, sometimes we tend to attract unscrupulous people. It has the potential to do some harm down the road.

Your office handles complaints from many of these home buyers. What are some of the most common complaints you receive?

One of the most common complaints we see on the front end is the bait and switch. My good-faith (estimate) -- which certainly is just that, an estimate -- changed drastically. They are now at closing. There's pressure to sign. The market is limited as to what they can buy. They feel they have to sign in order to get the deal, but the terms may not be correct. We are seeing people actually in terms of documents getting snuck in. The property changes hands right before closing. Now you have to redraw documents. The lender redraws documents with a new seller who wants additional money, charging more than you agreed to. Unfortunately, people are signing and agreeing to it. On the back end, improper servicing is probably the biggest problem by far. Companies have been able to make their living on cheating people. If you cheat a million people and you do it only 5 cents at a time, with compounding interest you can make a lot of money.

How effective is state and federal regulation of lenders in Nevada?

In terms of the hammer, we don't have it at the state or federal level. Most of the cases that you have read about were brought by groups throughout the country that flat out did the work first and then the feds came in on the back end. We are starting to see more, but not as much as we need.

How prevalent is predatory lending in the Las Vegas area? What needs to be done to control predatory lenders?

Very prevalent. Like anything where greed is the factor, I think it's difficult to stop it. One of the things we can do is to do more in terms of enforcement. I think we need to do what some other states have done and make some of it a criminal practice to really take the advantage out of it.

How important is education in the effort to curb predatory lending?

I think education and financial literacy is important. It plays a vital role in helping understand the basics. I think the problem comes in when we make the person who is victimized seem as though it's their fault ... when the reality is you can't be an expert at everything. That's why we have rules to make sure people don't do something that's inappropriate. So, yes, (education) is important, but it's not a panacea.

Mortgage companies in recent years have devised lending programs -- such as interest-only loans and adjustable rate loans -- to allow many people to get into a home with little money down. Those loans are likely to get very expensive if interest rates continue to climb. Is there a concern that these programs allowed people to buy homes who soon may not be able to afford the payments?

There certainly is no intent to take out the consumer choice. Programs have been devised to provide financing of all different types. But some of it is not financing to get you in. It's financing that really devalues the property and is not a good deal to the consumer.

Given the added responsibilities of homeownership -- repairs, taxes, insurance, etc. -- is it right for everyone? Do lenders and real estate agents need to be more responsible and tell some people it's not right for them? Do fair housing laws allow lenders and agents to make that statement?

I think there are times a lender needs to say "no." There are times that groups that assist potential homeowners need to say you're not ready. Then certainly if a consumer ignores your advice, so be it. The problem is when different consumers don't get good advice from different professionals and they don't rely on the appropriate professionals during the process. They really should be focusing the lending side to the lender and the real estate side to the real estate agent. If you are using a broker, focus the broker side to shop and get me the best deal and not sort of mingle them all together. As long as you are doing it across the board and on a fair basis, fair housing does not prevent you from telling the truth. You are not saying it because of who they are, you're saying it because they are not ready.

You have, in the past, criticized the run of large bank mergers. Have we seen any significant decrease in community lending practices in light of consolidation?

We've seen an elimination of certain lending products designed to serve the low- and middle-income market. We've seen an elimination of banking services. We've seen an elimination of investment in certain communities. Across the board, as banks become larger under bank modernization and there is less local control you see less available credit and capital for low- to moderate-income people. For example, in terms of creating mortgage products that are germane to Nevada, most banks don't have the authority to do that anymore. They have to go to their corporate headquarters and wait for corporate to create a product that is designed as a cookie cutter for all of their markets. That doesn't benefit a market that is changing as fast as ours.

Are Nevada banks doing their part to lend to all segments of the communities they serve, as mandated by the Community Reinvestment Act of 1977?

Not even close. Their lending, even accepting applications from the low- to moderate-income market and minority market, is low. Their approval rates are much lower. ... In terms of checking accounts, most clients pay more in checking account fees just to maintain an account than they did 10 years ago when banks were really trying to do a lot more under community reinvestment. Then you have some that are the lone wolves that do great work and even if the law went away would still do great work. But most of those are small institutions. The banks that have been successful are the ones that do it because it's part of their mission. ... It's not a compliance thing they do. Having the title community bank doesn't necessarily do it. Then you have some large banks that are trying. Banks that have maintained regional control that are not completely controlled by their national headquarters are doing a good job in Nevada and trying to do a good job.

Some state officials and lawmakers are pressing to put the control of housing discrimination complaints in the hands of a Nevada agency -- the Nevada Equal Rights Commission -- instead of the U.S. Housing and Urban Development Department, where the complaints are currently handled. Is this a positive move?

It depends on whether or not the agency can effectively and quickly process complaints and really get the expertise to do the job from an administrative standpoint. I'm sort of going to say let's wait and see what their proposal is.

Kevin Rademacher covers utilities and finance for In Business Las Vegas and its sister publication, the Las Vegas Sun. He can be reached at (702) 259-4069 or by e-mail at kevinr@lasvegassun.com.