Federal Housing Reform and Stimulus Bill, H.R. 3221

This is a response from our Nevada Senator John Ensign updating us on the Federal Housing Reform and Stimulus Bill, H.R. 3221. I thought you might find this helpful, interesting and hopefully informative. You can also visit Senator Ensign’s web site at http://ensign.senate.gov. for additional information and updates. As you can see, not only are the Las Vegas and Summerlin real estate foreclosure concerns being addressed but our representatives are assessable and responsive to your comments.

June 11, 2008

Mr. Joe Laliberte

Prudential Americana Grp

Dear Mr. Laliberte:

Thank you for contacting me about subprime loans, predatory lending practices, and the current housing crisis.  I value the opinions of every Nevadan and am always grateful for those who take the time to inform me of their views.

 The housing market in Nevada has experienced significant turmoil in recent months. Housing sales are sluggish, home prices have fallen, and new home construction has slowed. The increasing rate of foreclosures occurring in our state is also of great concern. Indeed, in the first quarter, Nevada posted the worst foreclosure rate in the nation at nearly four times the national rate. These foreclosures are a result of the real estate bubble bursting after years of skyrocketing home values. Contributing factors to the unusual spike in foreclosures include lax lending practices; aggressive real estate speculation; the increasing use of exotic loans; unwarranted faith that home prices would continue to rise; and, in some cases, financial misrepresentation and fraud among borrowers and lenders. My colleagues and I have considered several different measures to address the depressed housing market.

 You will be pleased to know that I have been successful in working with the leaders of both parties to help the Senate pass a bipartisan housing reform and stimulus bill, H.R. 3221. Among the many provisions aimed at bolstering the ailing housing market, this bill includes a $7000 tax credit for buyers who purchase homes in foreclosure. The high number of recent foreclosures has created a glut of homes available on the housing market, dragging down all home prices. The tax credit should encourage potential homebuyers to purchase this excess housing inventory which will help stabilize falling home values.

 H.R. 3221 also includes consumer counseling assistance which will help distressed homeowners who are currently struggling to meet their financial commitments. Consumer counseling will enable borrowers to work with their lenders in hopes of finding positive solutions that will keep them in their homes. Another provision in the bill will simplify mortgage disclosure forms so that future buyers have a better understanding of the mortgage terms they are agreeing to when purchasing a home. Because the housing crisis affects each community differently, this bill also provides additional financial resources to states and municipalities so they can take further steps to stabilize their local markets.

 You should know that the bipartisan Senate housing bill has been sent to the House of Representatives, where it awaits action. It is my hope that the House can act as quickly as the Senate and pass this bill without delay. Partisan politics and special interests should not stand in the way of providing struggling Americans with the housing relief they need.

 The Administration has assembled a private-sector group called HOPE NOW, which has developed a plan that could assist over one million subprime borrowers feeling financial stress under adjustable rate loans.  The HOPE NOW program is designed to help homeowners who can afford the current starter rate on a subprime loan but not the higher payments once their interest rate goes up.  This effort, which involves no government funds, will freeze interest rates for eligible borrowers and create a streamlined process by which struggling homeowners can work with their mortgage holders to avoid foreclosure.  This program has successfully assisted over 500,000 homeowners to stay in their homes.

 Thank you again for sharing your thoughts with me. Please know that as the Senate continues to deal with the housing crisis, I will be sure to keep your thoughts in mind as we examine whether or not further legislative action is required. Feel free to contact me in the future on matters of importance to you. Should you have any other questions or comments or would like to sign up for my newsletter, please do not hesitate to either write or e-mail me via my website at http://ensign.senate.gov.

Sincerely,

 

JOHN ENSIGN

United States Senator

 

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If you have any questions or wish any additional information just call or email me.

Joe Laliberte

702-499-1747

Joe@JoeLaliberte.com

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Las Vegas Real Estate Foreclosure Alternatives and Resources

This blog is a compilation of information related to foreclosure options in an effort to help people facing the possibility of foreclosure on their home. Many people do not know or understand what their options are when it comes to the possibility of loosing their home. I hope to help anyone who would like to learn more about how to stop their home from going into foreclosure and the options they may have to avoid it. This is not written to be a complete and comprehensive document on the subject only a starting point and guide to head in the right direction. I hope you find it helpful.

These are the basic options available with a brief description:  

A. Do Nothing– Let the mortgage rate adjust and the payment increase. Read your note (the lenders documentation you signed when you purchased the home) to find out if your mortgage interest rate adjusts, what the interest rate will adjust to, when it will adjust and how it will affect your payment. If you cannot afford to make the monthly payments the home will ultimately be lost to foreclosure at auction. Future creditors will ask if you have ever been foreclosed on. Credit reports will disclose this information.

B. Payoff/Refinance– Obtain a new loan or refinance the property. Identify if the current loan has a prepayment penalty for paying off the loan within the current time frame or within the time frame since the loan was first originated.

C. Reinstatement– Paying off all the amounts owed to the lender to make the loan current. This may include not only back payments but also interest, late fees, taxes, attorneys fees and possibly more.

D. Loan Modification-Renegotiate your loan before or after the rate adjusts with the current lender. Negotiate the interest rate down from where it is or where it is going. Negotiate a fixed rate loan and or the term of the loan over a longer period like 35 or 40 years vs. 30 year. Call your mortgage company and ask for the note modification or home retention department and will most likely work with you. It is possible they will put you in a new mortgage with no fees. If you would like we can help you with this process and there are references contact information below,  just call.

E. Forbearance– Call your lender. They may consider allowing a temporary payment reduction.

F. Short Refinance – Although rare, in this case the lender agrees to forgive the difference between what you owe on the property and what the home is currenly worth. A more complete blog on this can be found at Bankrate. 

G. Partial Claim – Lender may loan borrower a second loan on the property for the amount that settles the back payments, costs and fees associated with the borrower being behind in the loan payments.

H. Deed in Lieu of Foreclosure – This option gives the property back to the lender instead of forcing the lender to foreclose on the property. The lender may require that the home be in good condition and current on mortgage payments and taxes. Most new loan applications will inquire if this has ever happened to the borrower.

I. Sell the property for maximum value. Have the property in the best possible condition and price it to sell. Pay off the debt and retain any equity derived from the sale.

J. Sell the property Short (better than foreclosure or bankruptcy). This occurs when the property value is less than the amount owed on the property when combining the first mortgage, second and potentially the third mortgage on the property. A good real estate agent who knows how to handle short sales will help his client through the process by helping with the following for his clients.

    1. Guide the homeowner through compiling all the related documents needed. Identify exact loan balances, delinquent mortgage payments, Home Owner Association payments, possible judgements and/or liens and prepayment penalties.

    2. Coordinate a written authorization for the Realtor and title company  to speak to the lender(s) on their behalf.

    3. Contact the title company to request copies of liens/judgements, Deeds of Trust and Notices of Default if applicable against the property. Carefully read the documents identifying the type of loan and any possible additional charges connected to the loan.

    4. Contact the lenders (first, second and third mortgage holders if applicable) loss mitigation or short sale department. Ask them for approval to sell the property as a short sale. Identify what documents they will require to review the loan for a short sale. Identify what their turn around time is and request those documents be faxed as soon as possible. Identify the maximum amount of closing costs that the lender can be charged. Take extremely good notes.

    5. Compile and forward the documentation that is required by the lender(s) back to the lender(s).

    6. Compile the documents for the title company.

    7. Negotiate with the buyers and the lender(s).

    8. Continuous contact and communication with all the parties involved in the transaction. Terms of the sale can be changed by the lender(s) during the escrow period.

K. Foreclosure – Notice of default filed. Because this is a matter of public record people will be calling, letters will be received and people will be knocking on the door to discuss the sale of the property. The lender will get more insistent about receiving payment on the outstanding loans. The process will take 3-4 months before the homeowner is evicted from the property. The homeowner will loose the house.

L. Bankruptcy – This option can liquidate debt and/or allow more time.

  1. Chapter 7 – Completely liquidates and settles personal debt.

  2. Chapter 13 – Coordinates a plan for payments to be made toward paying off debts within a specific period of time (generally 3-5 years).

For additional information about bankruptcy I suggest going to the blog of Darren Welsh our General Council at Prudential Americana Group, Realtors at http://ameglegal.wordpress.com/ . He offers more a more detailed explanation and resources.

We want to help anyone who is in this situation that needs help and advice. This is a difficult process to go through and we want to help make it as smooth as possible for those who need and/or want it.

Additional resources referred to me by Aaron Gordon (who also has a great blog) are:

Homeownership Preservation Foundation hot-line at 888-995-HOPE.

Home Retention Departments by Lender

Web site designed to help people stay in their homes by Moe Bedard .

These are some very knowledgeable local contacts that can be very helpful.

Anita Krikes – First Horizon Home Loans Akrikes@firsthorizon.com or 702-795-0774.

Mickie Salgado – Equity Title Company MSalgado@EquityNv.com or 702-835-0777

Joe Laliberte – Prudential Americana Group, Realtors Joe@JoeLaliberte.com or 702-499-1747

JoeLaliberte or OurLasVegasRealEstateAgent or TheVistasHomes

I am continuing to research this topic and will continue to update this posting as I get additional information.