FACE TO FACE WITH YOUR LENDER
July 1, 2009 is the proposed start date for the new Nevada Foreclosure Mediation law. A homeowner who receives a foreclosure notice after July 1 can elect mediation and meet face to face with the lender, and according to Bill Uffelman, the President of Nevada Bankers Association, the banks will negotiate most anything relating to their home loans. Mr. Uffelman confirms that the banks will be more than willing to negotiate a Walk Away, probably more so than a loan modification, especially if the homeowner has little or no current income. While most homeowners will intially want to modify their loans and remain in their home, some won’t and most shouldn’t (yes, most). Barabra Buckley (D) estimates that 20% through 70% of the homeowners will benefit from mediation.
Since “everything is on the table” when it comes to foreclosure mediation, based on past real estate related mediations, I am confident the sucess rate will be closer to 70%.
Whether the Nevada Foreclosure Admininstrator will allow this mediation process for other types of situations is anybody’s guess(rental properties appear to not be eligible). Lets hope that soon the Court will allow commercial foreclosures i.e. strip malls, hotels, office buildings (to name a few) to be mediated under the Mediation Program. Commercial foreclosures, while once “the wave of the future” are happening here in Las Vegas, but I doubt they will stay here. Against that backdrop, if one can convince the bank to mediate a loan for a strip mall that is about to be sold at a trustee sale, would the Court allow it? Eventually, probably.
As one third generation real estate investor once said of Las Vegas: Either through a foreclosure, short sale, walk away, loan mod or by hook or crook, the residential and commercial mortgages must eventually be roughly equal to the home’s value. That must happen for the Great Recession to end.