THE FOLLOWING STORY NEVER HAPPENED IN VEGAS
The Vegas famly has owned a home in Las Vegas for 4 years, and live with their 3 children. Mr. Vegas is a residential new home electrician, and had his hours cut last summer. Mrs. Vegas works as a caterer, now more part time than full time, at the Casino on the Strip. Their next door neighbor’s house just sold at a foreclosure auction for $125,000. The Vegas Family owes a total of $225,000.00 against their 2 mortgage loans. They stopped making their mortgage payments late last year and just received a Default Notice on July 2, 2009, stating that their house is now in foreclosure. The Vegas Family is afraid, but they take immediate action to resolve the problem which takes away some of the fear.
UN SHUFFLING THE PARTIES
The Vegas Family immediately retains a local attorney who immediately sends a certified form letter to the Bank, Trustee and Judicial Foreclosure Administrator wherein the Vegas Family elects mediation. The Vegas Family attorney records the form letter with the Clark County Recorders’ Office.
The Bank receives the form letter and assigns the matter to an experienced bank employee who sets up a file and advises that he will be handling the matter for the Bank and will have full authority to enter into contracts on behalf of the bank.
Likewise, the Judicial Foreclosure Administrator assigns the matter to an experienced, trained Mediator who advises that she will be handling the matter on behalf of the Judicial Foreclosure Administrator and has full authority as the Mediator.
The Vegas Family attorney calls the bank employee and establishes rapport with him. They discuss the Vegas Family’s case and express a sincere desire to resolve the matter at the mediation. The Vegas Family attorney voluteers to provide the bank employee with certain information to make the bank employee’s decisions as easy and accurate as possible. The bank employee reciprocates, and the parties exchange information and provide the Mediator with a copy of the information.
The mediator contacts the bank employee and Vegas Family attorney and schedules a mediaton session date at her office. The Vegas Family and the bank each send a check for $200.00 to the Mediator who deposits the check in her trust account.
The Vegas Family, Vegas Family Attorney, bank employee and mediator all show up at the mediation session and meet in a large conference room to discuss the case. The bank employee says that the Vegas Family hasn’t made a mortgage payment in 8 months and as such, they have failed to honor their agreement. The Vegas Family attorney says that the mortgage payments were not affordable for the Vegas famly and they were provided a mortgage with bad terms.
The mediator says that everyone in the conference room is a victim of the Great Recession, everyone is to blame and that that everyone needs to pay. The bank employee and Vegas Family reluctantly agree.
CARDS ON THE TABLE FACE UP
While not happy, the bank employee and Vegas Family further agree that they need to speak openly about the situation, evaluate and accept the risks, the pros and the cons and work towards a settlement. Everyone in the room speaks about the case frankly.
They realize that their case is unique and different from other people’s problems, but also has some similarities to the others. In this particular case, the mediator suggests that the parties agree that the bank should lower the interest rate on the loan and reduce the monthly payments for a year. In return, the Vegas Family agrees to make the payments on time and extend the loan out for 40 years and to work with the bank in the future if other problems arise. A settlement agreement is reached. The Vegas Family attorney offers to type up a written settlement agreement and provide it to the bank employee for his review and approval.
The bank now has a conforming loan on their books and does not have to incur the costs of foreclosure. The Vegas Family can stay in their home and have an affordable monthly mortgage payment.