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Archive for NV Foreclosure Mediation

According to a recent survey conducted in August by the Nevada Association of Realtors, nearly one in four Nevada homeowners who went through foreclosure stated that they walked away from their mortgage despite their ability to pay. Surveyors interviewed 1,000 homeowners by telephone in August for the report, including 500 who had received at least one foreclosure filing during the previous year. The survey also found that most of these homeowners didn’t know about state and federal programs available to them, and those who did, found them unhelpful with only 3% helped in any way by by the Nevada Foreclosure Mediation Program.

Despite calling their decision to walk away from their mortgage as a strategic default, a good business decision advised to them by people they trusted, Linda Rheinberger, last year’s president of the Realtors association, disagrees. She claims agents should do more for homeowners to let them know what resources are available to them, perhaps like the $103 million allocated to Nevada through Home Affordable Foreclosure Alternative, a federal program created under the $700 billion bailout in 2008 that rescued banks, automakers and other institutions. ”It also reinforces our belief that lenders would do well to speak to their customers before foreclosing and to continue streamlining their short sale processes, since short sales are one viable alternative to foreclosures,” she said. With 65% of respondents reporting spending at least one-third of their income on housing when they received a notice, hard-working home owners do deserve to be made aware of all the alternative options that are available to them, like a short sale, for example.

If you are a Las Vegas area homeowner facing a possible foreclosure and wanting to learn more about your options, including a Las Vegas short sale, contact us today for a no obligation short sale consultation.

Nevada leads the way with legislation to support distressed homeowners…AB 149 established the Mandatory Nevada Foreclosure Mediation program for Nevada homeowners with a Notice of Default filed after July 1, 2009.
See related posts for more info:

It looks like a team of  U.S. Senators who say they are “fed up with the mortgage modification efforts of the nation’s largest servicers” have introduced new legislature  entitled  the “Preserving Homes and Communities Act of 2009″.  Read the full post here:  New Bill Will Force Modifications and Restrict Foreclosures

More Informative links and news stories  for the Week of October 28, 2009:

Q&A: Shiller Sees 5 Years of Stagnant Home Prices – Wall Street Journal Real Time Economics Blog

WSJ: Delayed Foreclosures and “Shadow” Inventory - Calculated Risk Blog reporting n WSJ article.  Could we finally start seeing more inventory (foreclosed/REO properties) coming on the market?  We may see a “spike” in the 4th quarter of 2009.

BofA CEO Ken Lewis to Retire

Case-Shiller House Prices increase in July An excerpt from this blog post…

In Las Vegas, house prices have declined 55.2% from the peak.
The debate continues – is the price increase because of the seasonal mix (distressed sales vs. non-distressed sales), the impact of the first-time home buyer frenzy on prices, and the slowdown in the foreclosure process (with a huge shadow inventory), or have prices actually bottomed? I think we will see further house price declines in many areas.

NV foreclosure mediationThe Foreclosure Mediation Program was established as a result of the Assembly Bill 149, passed during the 2009 session of the Nevada Legislature.

This law establishes a Foreclosure Mediation Program for owner-occupied residential properties that are subject to foreclosure notices – formally known as a Notice of Default and Election to Sell – filed on or after July 1, 2009.

Here are two websites and informational brochures outlining the details of the foreclosure mediation program:

  1. Foreclosure Mediation information from the Nevada Supreme Court website:
  2. Legal Aid Center of Southern Nevada – Visit this site for information on Free Foreclosure Mediation classes.
    Download this informative brochure on the timeline and specifics of the mediation program: lacsn_foreclosure_mediation_program_handout_7.09

mediationThe mandatory mediation program will have an impact on our market as 80% of all home sales in Las Vegas are foreclosed homes. I think one of the most clear and concise explanation of this new federal law is written by a local attorney who specializes  in real estate law, Robert Noggle. He has graciously contributed the following article.

A new Nevada law allowing any homeowner receiving a notice of default from their lender to request mandatory mediation with that lender becomes effective on July 1st.

The purpose of the mediation program is to avoid a foreclosure by providing a forum for home owner and lender to negotiate a loan modification including a short sale.

The most important development is that the lender must be represented at the mediation hearing by a representative who has authority to modify the loan or who has telephone access to someone with such authority.  The lender’s failure to do so may result in the mediator modifying the loan.  Proposed court rules for the program allow a lender to participate by telephone if approved by the mediator.

The mediation is nonbinding.  The lender retains complete discretion as to whether to modify the loan and, if so, on what terms.  However, a trustee’s sale of the home may not occur until the mediation is completed.  The trustee’s sale is the final step in the foreclosure process.  As a general practice the lender makes the winning bid at the sale and becomes the owner of the home.

The cost of the mediation is $400 divided equally between the homeowner and the lender. According to the proposed rules the maximum period of time allotted to a mediation session is four hours.  The homeowner must provide a financial statement together with a Housing Affordability Worksheet.  The lender must provide a certified copy or original of the Deed of Trust and promissory note together with a copy of each assignment of the note and deed of trust.

The lender’s failure to provide the required documents may result in sanctions. The lender may also provide an estimate of the short sale value of the property if the loan cannot be modified.

Under the proposed rules the mediation must take place within 90 days of the filing of the notice of default. By law the foreclosure process can take no less than 111 days from the filing of the notice of  default to the sale.  The mediation program is mandatory at the homeowner’s request if the Notice of Default was filed July 1 or thereafter.  The parties may stipulate to mediation if the notice of default was recorded prior to July 1.

Final mediation rules will be issued in the near future.  However, as a new program there are many unanswered questions as to how effective the program will be.  Whether lenders will participate in good faith to avoid foreclosures is unknown.

Based upon cases from around the country a lender’s ability to provide the necessary documentation including copies of all assignments could be a serious challenge for them.  For the homeowner the ability to present a case for a loan modification will depend upon their ability to make their numbers work so as to persuade the lender of their ability to make future modified payments.

By: Robert B. Noggle, Attorney
Black & LoBello

Robert B. Noggle may be contacted at (702) 869-8801 or rnoggle@blacklobellolaw.com.  For more information visit www.blacklobellolaw.com

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