News: Las Vegas Housing Market Still In Trouble

In recent weeks, headlines all over the nation have speculated that the housing market may have finally bottomed out and that home prices could be on their way back up. Hints that the economic recession is coming to an end have bolstered this presumption, as the stock market has begun a slow recovery and property value in several major cities have shown slight increases for the first time in many months. Unfortunately, Las Vegas appears to be a unique case, where positive economic trends enjoyed by the rest of the country have not been so visible, and in some circumstances, absent altogether.

The economy of Las Vegas has been one of the most severely impacted since the beginning of the recession and today it is still declining despite positive growth in most other cities. The unemployment rate has steadily increased throughout the year and last month it hit an all time high of 13%. Consequentially, many families who once enjoyed the benefits of two household incomes are now trying to make ends meet with only one, and several of those who were able to keep their jobs have experienced cuts in their salary or benefits. Because of this, more and more homeowners are finding themselves unable to make their mortgage payments. This is reflected in a recent RealityTrac news release, which reported that Nevada has topped the foreclosure list for the 31st consecutive month, with one in every 56 housing units receiving a foreclosure filing in July alone.

News: New Nevada State Law A.B. 149, FHA Revisions To HAMP Help Homeowners Receive Loan Modifications

With the continuance of the national recession, the broken state economy, and the skyrocketing unemployment rate in Las Vegas, many are asking themselves, “how can I afford to stay in my home?” Loss of income, financial hardship, and the effects of predatory loan practices have many Nevadans losing sleep, and for good reason. Las Vegas is currently plagued with foreclosure problems and has quickly become one of the hardest hit cities in the United States.

The solution to this crisis has not been the same for everyone, but for many, loan modification has been the answer. By restructuring the terms of the original contract between the borrower and the lender, and by lowering the borrower’s monthly mortgage payments, many homeowners are becoming financially secure once more. Recognizing the positive impact of loan modification, state and federal government has made serious efforts to create and amend laws that assist families in staying in their homes. Recently, some of these new laws and revisions have taken effect:

A.B. 149

A.B. 149 became effective July 1st of this year, but due to the lack of widespread media exposure, many are not yet aware of the rights this new law bestows upon homeowners. In order to decrease the overwhelming rate of foreclosures, particularly in Las Vegas, the state legislature designed a bill to help Nevadans lower their mortgage payment. To facilitate this, if a borrower submits a request, lenders must now attend a mediation process in which the borrower’s circumstances are analyzed by a third party. Furthermore, until this mediation has been concluded, the lender cannot continue with the foreclosure process. This can relieve much of the stress of troubled homeowners. Not only does it allow them to prepare the necessary mediation documents without the fear of their house being seized, it forces lenders to sit down and at least attempt to negotiate an equitable agreement.

FHA Loans

In addition to the new lender requirements outlined by A.B. 149, other support has recently been provided by the federal government. Many are aware of the provisions included in The Helping Families Save Their Home Act of 2009; but the advantages outlined by this law have mainly benefited homeowners whose loans were owned by Fannie Mae or Freddie Mac. Lawmakers recognized this predicament and sought to expand the scope of the assistance being offered. On July 30th, the Federal Housing Administration (FHA) announced new guidelines for their Home Affordable Modification Program (HAMP). Under the new guidelines, FHA borrowers will be eligible for loan modification, significantly lowering their monthly mortgage payments. These changes take effect August 15th, and are projected to help thousands of Americans avoid foreclosure each year.

What Is a Loan Modification?

A loan modification is an agreed upon change to your existing loan contract by the lender and you, the homeowner. The purpose of a modification is to help you keep your home and to keep your home affordable. The most common form of loan modification is a reduction in your interest rate, fixing the rate and reducing your mortgage payments.

In the past, lenders agreed to loan modifications only when a borrower was delinquent and suffered a hardship such as a job loss, divorce, illness, etc. Today, lenders are able and willing to agree to loan modifications based on the type of loan (Adjustable Rate Mortgage) and the increase in payment of these loans. However, your ability to obtain a loan modification is greatly affected by when you begin negotiations with the lender for the modification. The sooner you begin the better your deal is likely to be.

Time is of the essence.

A key factor in successful loan modification is that the borrower can afford their home at a reduced interest rate and payment. Remember, it is the reduction in payment and interest rate that makes the loan a modification. When payments go up and loan balances go up – the loan is not modified. In that case, the loan balance is simply increased to repay any past due payments and charges. True relief comes from a reduction in payment and interest rate.

Contact us today for a free consultation, we will discuss your options with you. We will help you keep your home and keep your home affordable. Help is just a phone call away 702-966-5660