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.
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