With the rapid decline in Las Vegas property values over the past couple of years, many valley residents are having to decide between a short sale or home loan modification in order to avoid foreclosure.
The Making Home Affordable program, launched by the Obama Administration on March 4th, started to see some progress on April 15th as the first six banks received their portion of the $75 Billion package and adopted the government’s modification guidelines.
While the Home Loan Modification Program was created to only help up to 3-4 million at-risk homeowners, Las Vegas residents who are facing significant hardships due to adjusting loan payments, predatory lending, RESPA violations, and exotic mortgage programs may have an advantage in the modification or short sale approval process.
Keeping in mind that you can only qualify for the Home Affordable Modification program one time, it is important to understand your legal modification rights before entering into a negotiation process with your lender on your own.
To qualify for the government sponsored Modification Program, homeowners need to satisfy these basic guidelines:
1. Property must be owner occupied, single family 1-4 unit property
2. The home must be the primary residence
3. First lien loans must have an unpaid principal balance equal or less than:
1 Unit: $729,70
2 Unit: $934,200
3 Unit: $1,129,250
4 Unit: $1,403,400
4. The property must have been purchased prior to Jan 1, 2009
5. The payment on the first mortgage (principal, interest, taxes, insurance, HOA) must be more than 31% of your gross monthly income
6. You must be facing a hardship that is or will prevent you from making your mortgage payments
7. You must also prove that you don’t have sufficient assets to continue making the current mortgage payment for a prolonged period of time
Even though the Obama Modification Program’s objective was to create clear guidelines that would make it easy for all lenders and service providers who are participating in the Financial Stability Plan to follow, there are still many unanswered questions due to the unique scenarios that each homeowner is facing.
With an overwhelming number of homeowners calling their lenders with hopes of principal reductions or easy refinance modification solutions, the Las Vegas homeowners who are in need of immediate help run the risk of getting lost in the shuffle.
This new modification plan is not necessarily a program designed to help only the at-risk homeowners. It was also created to deliver an added level of security to the financial institutions that this economy needs to continue providing credit and mortgage loans to new borrowers.
With that being said, finding a single win-win modification or short sale solution is nearly impossible and may result in several more casualties before the foreclosure crisis is over.
Bottom line, we are moving in the right direction, but you should proceed cautiously with your modification or short sale negotiations.
Scheduling a free consultation with a qualified attorney who understands the politics and procedures would be your safest move during these uncertain times.
If you feel like your past mortgage or Las Vegas real estate transaction had an impact on your hardship, you may want to question whether or not your current lender is the best advocate in your corner to build a strong case in your defense.
To set up a free consultation with an Attorney from Paladin Legal Advocacy Center call us at 702.376.0088 or you can attend one of their free Loan Modification Seminars held every Wednesday at 6 pm.