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Loan Modifications for
Las Vegas Homeowners
Viable Option or the Latest Scam?
After the boom of
the
Las Vegas real estate
market 2003 through 2005 and the subsequent decline of 2006 through
2008 and the ensuing
Las Vegas foreclosures,
many borrowers have been left owing much more on their
Las Vegas homes
than what they were worth. For those going through divorce, health
issues, job relocation or job loss who can no longer afford the
payment terms on their loan, there are only three options:
foreclosure, short sale or the newest rage: loan modification.
Foreclosure is the most drastic of the three alternatives. The bank
actually sells the home on the courthouse steps to the highest
bidder or takes it back from the seller if no one bids on it. Not
only is the borrower’s credit ruined for many years, the banks can
later come after the borrower for any loss (deficiency) they may
take on the home at a foreclosure sale.
A short sale is better, when it can be achieved. While the
borrower’s credit scores drop for a number of years, the bank cannot
look to the borrower to make up any loss the bank sustains as the
bank has already “approved” the short sale amount. However, short
sales are very difficult to close, and only an experienced
Las Vegas short sale
real estate agent can cut through the red tape. Sometimes the agent
can even market to investors to buy the home, and often the investor
is willing to allow the original owner to remain as a tenant.
But what is a loan modification? A loan modification is a legal
agreement that takes place between the home owner (or their legal
representatives) and the lender that holds the mortgage note (deed)
to the property. The modification is an agreement between both
parties to resolve the homeowner’s financial situation so that he
can afford the mortgage. It is intended to avoid a possible
foreclosure and ensure that the homeowner can handle the new monthly
payment on a long term basis. Depending on the circumstances, the
lender may choose to lower the interest rate on the mortgage, lower
the principal balance due on the mortgage, and/or extend the length
of time for repayment of the mortgage.
Below are the top 5 frequently asked questions about loan
modifications.
How does the loan modification process work and who can do it?
Homeowners can try to negotiate on their own behalf with the bank to
reduce the payments on their
Las Vegas mortgages.
But the process is fairly complicated and seldom will the homeowners
achieve success on their own. Or if they do, the rate and terms
negotiated may not be the best possible.
The other way is to talk to a professional modification consultant
to see if you qualify. After you have been pre-approved, you will
need to provide the back up documentation to your representatives.
Your representatives will present your situation to your lender and
handle the negotiating for you. The modification process can take up
to 90 days, but the results usually benefit both the homeowner and
the lender in knowing that a possible foreclosure will be avoided.
Before anyone walks away from their home, they should find out if
they qualify for a modification.
How do you qualify for a loan modification? Any homeowner that has
experienced a hardship that prevents the homeowner from fulfilling
their monthly obligations may qualify. Typically, anyone who has
seen a loss of income, anyone who is currently late on their
mortgage, anyone who is in foreclosure, anyone who has had medical
issues, anyone who has divorced, or anyone who has had any other
form of legitimate financial hardship that can be proved may be
eligible for a loan modification. Modifications can be used for
Las Vegas condos
as well as homes.
What are the benefits of a loan modification? The benefits usually
involve a lower interest rate for the homeowner, a reduction in the
principle owed, and/or possibly the term of the loan can be
extended. In some cases all three of these modifications can be
negotiated for the homeowner. Each case is unique, and the outcome
will be based on the negotiating between the client or their
representative, and the lender. But typically anyone who has
experienced a hardship could achieve a lower monthly payment.
What are the negatives of a loan modification? Unfortunately this is
field that seems to have attracted quite a few con artists. There is
usually an up front fee charged by most companies. Be sure that you
contact a modification consultant or company that has a high success
rate and no up front fees if possible. If a company does not use
attorneys with strong relationships to the lenders, their chances of
a successful negotiation will be less than those companies that have
already established those relationships. Other negatives should be
discussed up front by any modification consultant or professional
company that you talk with.
So unless you find someone reputable that has successfully done
Las Vegas loan modifications
(preferably referred to you by another satisfied client) it may make
sense to at least try and sell your home on a short sale rather than
lose it to foreclosure. If you would like more information on
shortsales and how they work, please contact our office at
702-985-7654. With so many
homes for sale in Las Vegas,
you need to make sure you choose an agent experienced in the short
sale process.
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