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Mortgage Mediation in Nevada
Mortgage Mediation in Nevada

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AIR DATE: September 24, 2010

In an effort to stem the wave of foreclosures in Nevada, state legislators passed a law more than a year ago that require lenders and homeowners to engage in a mediation process, before a lender can move forward with a foreclosure proceeding.

First year statistics from Nevada's Foreclosure Mediation Program show that more than half of the meditations have kept people in their homes. But critics say the program has helped only a small number of homeowners and that the program's administrators are preventing mediators from enforcing sanctions against banks.

How effective is the foreclosure program, and how many homeowners has it really helped? Have sanctions ever been levied against the banks?

GUEST
Verise Campbell, Program Administrator, Nevada Foreclosure Mediation Program
Michael Joe, Attorney, Legal Aid Center of Southern Nevada
Barbara Buckley, Speaker, Nevada Assembly
Keith Tierney, commercial and real estate lawyer; mediator, Nevada's Foreclosure Mediation Program

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COMMENTS:
I called BAC, my loan administrator for Fannie Mae, my mortgage holder and tried to discuss a loan modification because I am retired, living on SS# and my IRA and my loan was significantly under water. They told me that my income was too high for a loan modification. The reason it is too high is I need to withdraw from my conventional IRA to pay the mortgage. They advised me to stop paying my mortgage in order to qualify. This seems a bit rash to me. Do you agree? What if all underwater mortgage holders stopped paying their mortgages, what would happen?
GregSep 27, 2010 10:06:27 AM
As I suggested before, apply for mediation. BAC is using a common tactic to avoid negotiation. By not paying you simy create a default that has to be caught up.
Bob BeersSep 27, 2010 11:16:27 AM
There are multiple anecdotal stories about banks "dragging their feet". Reading only half the HAMP documents, are the banks collecting Servicer Incentive Payments, One time bonus incentive payments, Payment Reduction Cost Share reimbursements, Reimburseable servicer modification fees and charges,Yearly incentive fees, Pay for success fees, Current Borrower One-time Incentive (Yes, this is for the servicer and not the borrower???) while dragging their feet? Is there any way for a person trying to achieve a modification to check the banks participation in the HAMP program and the use of the persons name by the bank during the HAMP process?
CW ButlerSep 27, 2010 09:51:26 AM
I was told by a real estate agent that principle reductions are no longer allowed in loan modifications. Is this true?
davidSep 27, 2010 09:49:21 AM
Check out my comment on this issue below.
Bob BeersSep 27, 2010 09:52:35 AM
Bob, thx., your comment below indicates that we principle reductions are allowed. Is this true also with non-fannie mae etc loans? Is this thru the making homes affordable program?
davidSep 27, 2010 10:18:30 AM
No, not HAMP. As noted, the order to "forgive" may come from the administration and cycle through HARP or another program created to deal expressly with Fannie Mae, Freddie Mac and the other government mortgage underwriters. Also, please note that the correction has not yet been ordered, as mentioned in my previous comment.
Bob BeersSep 27, 2010 11:23:58 AM
My husband is in the military and we are due to move next summer. We currently own our home and are having no difficulty making payments, however, we need to sell our house before we move. I will have to quit my job when we move, which will make it difficult for us to make payments. Our credit score is over 800 currently - do you think the bank will be willing to work with us for a short sale? Our house is worth half what we paid for it 3 years ago.
JessicaSep 27, 2010 09:46:06 AM
I'm anticipating approaching my bank (Bank of America) about HAMP. I didn't see the newscast but I understand there was a newscast detailing that my bank has not been forthcoming with HAMP issues.

I currently have a letter from my employer stating that my job will end on a specific date (along with a couple hundred other fellow employees). I also have a death certificate from losing my spouse earlier this year. Both of these events fall into the "hardship" category. I believe only two such events are required to qualify for HAMP, that is, deserving a modification.

Do I wait until my job is finalized before approaching the bank? I was planning on waiting until my job was finished and using unemployment as my "income". I'm also in a special category being 60+ years old. Unemployment could last until I qualify for social security. However, Fannie Mae recently declared that unemployment income cannot be used for calculating income during HAMP. Can severence and/or a 401k be used to qualify (or, heaven forbid, disqualify) for HAMP?

Needless to say, I'm very concerned about my near term future and living in Vegas.

CW ButlerSep 27, 2010 09:38:12 AM
Apply for mediation now. Take the time during the approval process to put together the paperwork and financials that will be asked for.
Bob BeersSep 27, 2010 09:50:56 AM
In addition, the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages - one in five - are underwater with negative equity of some $800 billion.

There is historical precedent, on Christmas Eve 2009; the Treasury Department waived a $400 billion limit on financial assistance to Fannie and Freddie, pledging unlimited help. And there could be an existing program in which to move the funds, the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obama's loan modification effort. It should be noted that HARP was just extended through June 30, 2011.

Bob BeersSep 27, 2010 09:27:43 AM
I am also a mediator and I see no "fatal flaw" in the program. Out of the several dozen cases I have mediated over 80% have resulted in saved homes. We are the best program in the nation and it seems we should be trumpeting that fact rather than damning what works.
Bob BeersSep 27, 2010 07:05:58 AM
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