Our prior article here made the case that principal reductions, primarily through short sales, will end the Las Vegas Real Estate crises. Loan modifications, however, will play an integral role throughout 2010 as a catalyst towards a principal reduction, either by allowing the equity to catch up to the principal mortgage balance through natural appreciation, or via buying much needed time for the lender and homeowner to work out a short sale.
After years of repeated cries from tens of thousands of Las Vegas homeowners and small business, as illustrated in a Las Vegas Sun Article here, Nevada lenders are begininng to get the hint- work with the homeowners.
NOT OUR HEROS
Sadly, neither the lenders nor the casinos were the least bit helpful in finding the solution to the Las Vegas Real Estate Crises.
OUR REAL LEADERS
The solution to the Las Vegas real estate crises was discovered, using old fashioned trial and error, by local small businesses, with some help from UNLV, the Nevada Supreme Court and the Nevada state legislature.
THE MECHANISM OF SUCCESS
The solution will require loan modifications, short sales and when necessary foreclosure sales and bankruptcy. Actually, Las Vegas has been using that system since the beginning. Only now, however, after irrepairable damage to a generation of Americans, do we know when and how to implement those tools.
At an increasing rate, the homeowner will seek a loan modification as her first alternative. The lender will allow the qualified homeowner to enter into a three month “temporary” forebearance agreement where the homeowner makes monthly mortgage payments.
After three months of mortgage payments, the viabililty of the loan modification will be revisted and a permanant modification completed, if appropriate. If not, the homeowner goes into short sale. If the short sale doesn’t work, the homeowner peacefully transfers title and posession to the lender.
TRUST IS RESTORED
Las Vegas loan modification companies, as a whole, suffered a bad reputation earlier this year after the Nevada Attorney General charged several of them with fraud. As a result, Nevada passed new laws regulating loan modification companies and requiring them to be licensed and bonded. Bad loan modification attorneys were forced to move on to other endeavors.
The remaining Las Vegas loan modification companies and law firms are better and much more trustworthy.