Comments on: NV Law Change October 1 Restricts Deficiency Judgments on Foreclosed Homes

By: Bob

Bob — Wed, 04 May 2011 22:57:57 +0000

Banks caused this, and greedy people who bought more home than they could afford, and used their house as an ATM for “free cash”, does not matter what for. Seriously, if the only way to buy a house is 5/1 ARM or negative am loan, common financial sense says YOU CANNOT AFFORD IT!

The cognitive dissonance here is astounding. If you pulled money out of your house to “increase home value” you took advantage of the market so the market was good, now the market is bad because well, the pool of greater fools to sell to is shrinking and values are going down.

We’re proud to live in a country that gives you the freedom to do what you want with your assets and money; with that freedom comes the responsibility of knowing and researching what you are doing. When one invests in the stock market and takes a 50% hit, one doesn’t go to the government to be made whole. If you’re treating your house as an investment, as many foolishly still do, you need to do your research instead of listening to salesmen.

By: Chris

Chris — Fri, 24 Dec 2010 07:38:06 +0000

I have a similiar situation as Eva. I am living in a Las Vegas home that was purchased by my mother in 2006. Her and my dad own a home in California, so the LV house is not there primary home. I can no longer afford the payments and we are starting a short-sale in Feb. My 2 questions are: Will we owe the deficiency balance?(understanding the house in LV is a “recourse” state, they probably can). Can they go after her house/assets in CA? I have spoken to several friends who have gone through the SS process and everyone said that it went fast, smooth and they didnt owe anything at the end. I guess Im like everyone else and would like some clarity before going down this road.
Thanks!!!

By: Eva

Eva — Wed, 27 Oct 2010 23:06:02 +0000

I live in CA and I have a 2nd home in Las Vegas where my son is living. Tried loan modification with BA since Aug 2009 but got denied several times. Got a call fr them to tell me that the house is bank owned and will go on sale last July, then Sept for the 2nd sale date. My son still occupies the property and waiting for BA for more information. Can they come after my assets or can they charge me with defiency judgement?
Pls help me with info..
Thanks

By: Kathryn Bovard

Kathryn Bovard — Sat, 14 Aug 2010 02:15:39 +0000

Linda,

The new Nevada anti-deficiency law change is only effective for owner-occupied properties secured by a mortgage or deed of trust on or after October 1, 2009. Regarding tax ramifications, our best advice is to contact a tax attorney or CPA to discuss your specific situation. Have your tax professional check into the “insolvent debtor” qualifications under section 108 of the IRC.

By: Linda Eldridge

Linda Eldridge — Fri, 13 Aug 2010 15:05:18 +0000

Is there a law to protect against a Deficiency Judgment on rental property purchased in Las Vegas in 2006?

Do I qualify for a tax exclusion to avoid being taxed on the difference between the amount owed and the selling price in a short sale?

By: Lance

Lance — Sun, 04 Apr 2010 14:27:14 +0000

Thank you for this great blog!

I have a question about this new law. If the loan originated before 10/1/09 but was modified after 10/1/09, would this law apply?

For example, I had a 5/1 ARM Interest Only loan that was originated in February 2008 and was modified with new loan terms to a 40-year P&I in January 2010.

I think I know the answer (new law does not apply), but I thought I should at least ask.

Thanks!

By: Shelley

Shelley — Thu, 04 Feb 2010 15:46:44 +0000

I agree completely with the statement. Banks/Lenders caused the whole mess in the first place, with their sub prime loans, etc. They caused the property values to spike because they allowed so many people to purchase that couldn’t before. They also talked a multiple of individuals into adjustable rate mortgages telling them that it was bound to go down further. These individuals that could not really afford what they were purchasing, trusted the lender and got into the adjustable rate mortgages. When the rates started going up, these people were sunk. It was only a matter of time before the collapse happened. Once the collapse happened, it was the banks who caused the problem that received the bailout money, not the citizens that were caught in the aftermath. Even after the lenders received the bailout money, they didn’t pass ANY of the relief off to the homeowners. So the picture I see is… The lenders caused the issue because of their greed, they kept the bailout money because of their greed and individuals continue to suffer because of lender greed, including deficiency judgments in some states. The financial system in this country is extremely one sided and is laid on the backs of the individuals on so many different levels.

By: D

Thu, 01 Oct 2009 00:01:31 +0000

Interesting read on the short sale process. “If your home’s current value is significantly less than the amount owed, you are a candidate for short sale”. So, the bank recognizes that the home is worth less than the loan, but they usually will not modify the loan principle for the existing borrower – they CHOOSE to incur a lot of costs for realtors, lawyers, taxes, etc. while selling the house to someone else for the reduced amount.

Wouldn’t it make more sense for them to work with the existing homeowner(s) and adjust the amount owed to the market value and give them a chance to stay? It would save the homeowner, save the bank/lender and stop the short sale/foreclosure bleeding!

Banks and lenders caused the bad loans. Banks & lenders caused the decline in home values with all the short sales & foreclosures, and they just keep doing it!

By: Peggy

Peggy — Wed, 30 Sep 2009 23:56:01 +0000

Ditto above comment. Our home is worth 40% less than 3 years ago. We’ve tried to sell for 2+ years. We’ve tried modifications and despite 35% pay cuts and increased medical costs and issues, BofA does little to help. As we face short sale we now will have to face possible deficiency action.

They need to retro this in for all the loans made from 2004 on … especially the ones made by Countrywide, et. al.

By: Jan

Jan — Thu, 24 Sep 2009 00:15:53 +0000

I’m glad for those who need help in the future. I am a recent widow. My husband died of cancer, the wrong kind because of an exception on the homeowners policy. It did not pay. My house is now worth 50% of what it was and the payments are too much for me alone. A bonefide hardship. The money pulled out of equity was not spent on fancy cars or clothes. It was used to increase the value of the home with added square footage of 1100 SF and added two garages. It was the home we thought we would live in another 25 years. Everywhere I went for help I was told I “was not qualified” to receive aid. Now with a short sale pending for 3 months and the foreclosure eminent. This doesn’t help me and the 3000 plus other widows and widowers in my position here in Nevada. This lifevest won’t save me. Thank you very much.