Get free access to our world class MLS search tools, save your favorite listings, create saved searches & much more!

Beware Homeowners - Judicial Foreclosures Come to Las Vegas!

Posted by Mastura Zaini-Roberts on Thursday, March 29th, 2012 at 2:31pm.

Nevada has always been a non-judicial foreclosure state.  If a borrower was past due, all the mortgage holder had to do was produce copies of the appropriate documents and file foreclosure notices, and within approximately 5 months the foreclosure sale took place at the county steps. There was no right of redemption for the borrower, and the new purchaser took possession immediately.

But in the wake of the robo signing scandals, the Nevada legislature passed a new amendment, AB 284, which included the requirement that an authorized representative of the current lien holder had to complete and sign an affidavit indicating they had “personal knowledge” of all previous transfers of interest in the note. Most notes are sold by the originating lender within weeks of the initial closing, and often they are sold several times during the life of the loan.

Since there is absolutely no way any authorized representative of the current lien holder would ever be able to affirm personal knowledge that each previous lien transfer was done correctly, no lien holder would ever be willing to sign the new affidavit. Because of this, foreclosure filings have almost ground to a complete halt in Nevada, active inventory on the real estate market has shrunk to less than a two month’s supply, and properties priced at less than $200k are receiving multiple offers in droves.

Past due borrowers, many of whom have been sitting comfortably in their homes for up to two years while not making any payments, celebrated the new amendment. No more new foreclosure filings meant they might be able to stay another couple of years “rent free,” right?

Well, that celebration is about to come to a screaming halt. Banks, sitting on large inventories of non-income producing assets, have started to “wise up,” and they are pursuing the judicial foreclosure process instead. A judicial foreclosure does not require signing off on the AB 284 affidavit.

This has serious ramifications for past due homeowners.  A judicial foreclosure entails an actual lawsuit filed against the borrower. The filings include the entire amount of the past due note, all past due interest, and the lien holder’s attorney fees. In addition, the borrower will have to hire their own attorney to represent them in court.

Best case scenario: the borrower files bankruptcy to wipe out the debt, keeping in mind that any assets they have accrued will be used to reimburse the bankruptcy creditors. And they will still have to pay attorney fees for the both the court case and the bankruptcy out of pocket. And with both a foreclosure and a bankruptcy on their credit, it will be a long number of years before they will be able to qualify for home ownership again.

A much better alternative for the homeowner AND the bank is a short sale. Benefits for the borrower: in almost 99% of short sales any loan deficiencies are “forgiven” and in a few years the borrower can re-establish their credit and purchase another home. (In some cases owner occupants can even receive a credit from the short sale proceeds for moving expenses.) Benefits for the banks: a judicial foreclosure means the borrower has a one year right of redemption.  So the banks would have to rent out and maintain the property for at least a year before putting it up for sale to recoup some of their losses. A short sale is less costly and gets the asset off their books much more quickly.

So, Las Vegas homeowners, unless the sheriff is already at the door changing the locks, call us immediately to find out about listing your home as a short sale. The banks WANT to accommodate short sales now. They will still make you jump through paperwork hoops to get an approval, but their ultimate goal is to make it happen. As long as you have a little bit of patience for the process, you will soon be able to put this house behind you and start fresh again.

Mastura Roberts
(702) 919-5400
offers@greatlasvegashomes.com

Team Leader, The Tonnesen Team
Berkshire Hathaway HomeServices, Nevada
3185 St Rose Pkwy #100 Henderson, NV 89052

With over 30 years of experience helping families call Las Vegas "home!"



Related Blog Posts

New Construction of Las Vegas Homes

There is no denying that when you're house hunting, the allure of new construction in Las Vegas is undeniable. The Las Vegas Valley currently boasts dozens of builders with over 1079 floor plans to choose from. While the average price range runs in the mid $300Ks there are Las Vegas New Construction houses available...

The Las Vegas Real Estate Agent Who Went Too Far

As Realtors we are programmed to go the extra mile for our customers. It’s all about providing superior service, right? And Las Vegas real estate is super competitive, so you really have to step up your game. Over the years I have scrubbed toilets, cleaned ovens, babysat for pets, helped clients find jobs, and in a c...

Foreign National Financing for Canadians

During the recent mortgage melt down, banks had suspended all foreign national financing except for Canadians buying second homes in the United States. But as of last week, foreign national mortgage financing is once again available for citizens of other countries wanting to buy vacation homes in Las Vegas. Most Las Ve...

Strip Condo Only $125k!

Didn’t think you could afford Las Vegas real estate? Now you can own a condo right on Las Vegas Boulevard for only $125k! Sneak preview - own your piece of the fabulous Las Vegas Strip for a fraction of the usual cost. Located right between the between the beautiful Bellagio and the vibrant MGM City Center in the hea...

Agents sell homes for more than FSBOs: study

Contradicting previous research, new study finds FSBOs sell at discount   Key Takeaways Agents tend to achieve higher sales prices for properties than comparable FSBO listings, enough to offset their commission fee, according to a recent analysis. Academic research has often cast dou...

4 Responses to "Beware Homeowners - Judicial Foreclosures Come to Las Vegas!"

Andrew Yankama wrote: Diann, thank you for the bank information. It is very informative and well written. I am looking for a good deal on a Condo Hotel on , or not far from the strip.
Andrew

Posted on Tuesday, April 3rd, 2012 at 10:28am.

Napoleon wrote: Excellent post. I was checking constantly this blog and I am impressed!
Extremely helpful information specially the last part :) I care for such information
a lot. I was seeking this particular info for a long time.

Thank you and best of luck.

Posted on Sunday, April 8th, 2012 at 12:39pm.

Las Vegas is a Seller's Market Again! - justsold's Blog wrote: [...]Related Links

Las Vegas Shadow Inventory - Fact or Fiction
Is Judicial Foreclosure Coming to Las Vegas?[...]

Posted on Friday, April 20th, 2012 at 5:11pm.

Las Vegas Lawyers Lick Their Chops! - justsold's Blog wrote: [...]Links

Judicial Foreclosures Come to Las Vegas
Las Vegas[...]

Posted on Monday, April 23rd, 2012 at 2:01pm.

Leave a Comment

Have a Question?

Contact Us

Follow Us