Many Las Vegas homeowners are upside down or behind on their mortgage payments. We receive several questions from our clients about how they can avoid foreclosure by doing a loan modification or short sale.
While the politics, procedures, and guidelines for a successful Las Vegas loan modification literally change every day, per our short sale / loan modification attorney, there are still some basic fundamentals that you can be aware of.
As Las Vegas short sale specialists, we work closely with a local law firm to ensure our clients’ individual cases are handled by a legal expert who is bound by law to protect their financial interests vs the bank’s.
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Las Vegas Loan Modification FAQ
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What is a Loan Modification?
A loan modification is simply a restructuring of the current loan terms between the borrower and the lender. Lower interest rates, longer term, principal reduction, or a principal forbearance are a few examples of how a loan modification can help a homeowner lower their monthly mortgage payment.
Why would agree to a loan modification?
The main purpose of a loan modification is to reach a mutually beneficial agreement between a lender and borrower that prevents foreclosure or future payment defaults. With the rapid decrease in Las Vegas property values, prolonged sale times due to an over abundance of listing inventory, and the tightening up of mortgage guidelines for new purchases, lenders that acquire properties through foreclosure stand to lose significantly more money than potentially working out a new payment arrangement with a current borrower.
How do I qualify for a Las Vegas loan modification?
This is slightly a tricky question, so please refer to the legal disclaimer below.
The Making Home Affordable Modification program is a government sponsored loan modification plan that was designed to help up to 9 million American homeowners avoid foreclosure by reducing their monthly mortgage payments to something more affordable for a five year term.
To qualify for the Obama Modification Plan, you need to live in the home you are modifying, the balance cannot be more than $729,750 for a single unit, there has to be a significant hardship, and the possibility of foreclosure has to be imminent. Since this is such a new program, the various servicers, lenders, and other financial institutions are still learning how to adjust with the guidelines.
Qualifying for any other form of a loan modification that does not fall under the Making Home Affordable guidelines requires a negotiation process between the borrower, investors, and generally a servicer who may act as the middle filter. Since the lender / servicer’s main priority is to protect their investor’s financial interests, it is important to be familiar with any violations in the real estate or mortgage contract that potentially contributed towards your current financial hardship.
To answer this question more specifically, qualifying for a loan modification is a process that involves proving to the lender / servicer that you have the ability to make future mortgage payments on time based on a calculation of a new rate, term, principal amount, and your income, assets, and employment.
We are finding that equity, or the amount a home is underwater, does impact a lender / servicer’s decision as to whether or not they would approve a borrower for a loan modification or short sale.
Do I need to be late on my mortgage to qualify for a loan modification?
No, under the Making Home Affordable Modification Program, the guidelines state the a borrower does not have to be late on their mortgage to qualify for a loan modification. If your lender has forced you to go 90 days past due before they are willing to start the modification negotiation process, it is important to speak with an attorney about your legal recourse.
What if I am already in foreclosure?
Foreclosure can be postponed while a loan modification is attempted, but it is vital to file the proper paperwork as soon as possible.
What if I have assets, can I still get approved for a loan modification?
Since most lenders weigh their decision for a loan modification based on the threat of imminent foreclosure, having a significant amount of available capital does not strengthen your case. However, there are several other factors that can be taken into consideration, including monthly budget, lender or RESPA violations, employment and income.
Will the lender require an appraisal or inspection?
Yes, the lender may require that your property is inspected to determine the livable condition as well as the market value.
Can I do a loan modification on my own?
Yes, it is possible to work out a solution directly with your lender / servicer that lowers your monthly payment. Just be aware of any hidden language in the new contract that requires you to sign away your legal rights to litigation. Other things to pay close attention to are the terms of the new loan, whether or not your mortgage becomes a recourse vs non-recourse loan, if there are any balloon payments 15 – 20 years out, and the difference between a lower rate vs a longer term. There are literally hundreds of details that can mean the difference between the perception of a lower payment vs an actual fair loan modification.
What if I have already failed on my own, is there still hope with the help of an attorney?
Yes, most homeowners or real estate professionals are not well versed in real estate / mortgage contract law. Actually, most of the loss mitigation consultants or case managers at these large financial institutions are still learning the process. Knowing your legal rights, how to write a hardship letter, and who makes the final decision can give you a significant advantage for a successful loan workout.
A complete forensic loan audit may uncover several lender violations that your bank may not want to address court.
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*Legal Disclaimer – Please keep in mind that we are a real estate company that specializes in listing and marketing Las Vegas short sales. Since there are several legal logistics and details that apply to each individual scenario, we refer our short sale clients to a trusted local law firm that understands real estate / mortgage contract law. As a result of our trusted relationship, they have offered to give our clients free consultations to answer any personal loan modification or short sale questions.
Please contact us @ 702-376-0088 for more information. Since they do place first priority on homeowners who need immediate help, we’d like to please ask for your cooperation and to contact us to see if we can answer some basic questions and get you set up prior to meeting with them. We will respect your privacy and understand how sensitive every one’s individual situation can be.
Tony Sena
Tony Sena is broker/owner of Shelter Realty in Las Vegas, Nevada. For more than a decade Tony and his partners have provided residential real estate and property management services to sellers, buyers, investors, and property owners in the Las Vegas Valley. A Las Vegas native and former police officer for the City of Henderson, Tony brings to the table a unique local perspective that continues to serve his clients well.
Equal Housing
*This is not an offer to lend.
Approvals are not guaranteed. 
3033 West Horizon Ridge Parkway, Suite 110 Henderson, NV 89052 - Phone: (702) 376-7379 
