hosted a town hall meeting last night about the current housing situation in
Las Vegas, NV. Â The housing bubble popped
in 2007 and thousands of homeowners that were affected. Their property values hit
a low by going back to 1992 values.
several options for you in dealing with the sharp decrease in value.Â You will need to evaluate if it is beneficial
to you to wait it out or bail out of your current situation and start
over.Â Let me separate these options as â€œStay
in your houseâ€ and â€œLeave your houseâ€.
Stay in your
You can stay
in your house, continue to pay your mortgage, and hope the values will
increase. Values are increasing slowly in the current market but it is projected
that home values will not get back to 2007 prices for another 18-20 years, if
it ever happens. Currently we have less than 5,000 homes for sale in the Las
Vegas area. There are still thousands of homes in Las Vegas that have not been
foreclosed. How will they affect the market when these properties hit the
market? Itâ€™s all about supply and demand. We are having a slight appreciation right
now due to the low supply while we still have tons of buyers. It may be that
when these properties finally hit the market values could decrease again.
You can try
to get a loan modification or principle reduction. This is a long process and
there are absolutely no guarantees that you will be successful. A loan mod is
deemed successful by the banks if the dollar amount of your loan is changed by
$1. Thatâ€™s a lot of work for $1. You may not qualify depending on the type of
loan you have, if you make too much money, or if your debt to income ratio is
could access some of the programs that are available to help homeowners stay in
their homes. There are state and federal programs you can look into. Nevada Hardest Hit Funds offers mortgage
principle reduction, and several others. Â The federal government has programs in place
also with HUD.
You can quit
paying your mortgage and stay in your house. You may think that should go in
the column above. The ultimate end result with this option is that the bank
will inevitably foreclose. This may get you some free money that you were
spending on your mortgage but you will be taking a large hit on your credit
score as a result. You will come home at some point to a white paper attached
to your door with blue tape. That will be a Notice of Default which is states that
your lender has formally started the foreclosure process. That NOD is the bank
giving you 100 days notice. Next will come a Notice of Sale taped to your door.
This notice states that in 21 days your house will be sold. These notices are
not to be taken lightly. Donâ€™t think the problem will just go away. You are
well on your way to losing your house and the lender will not stop until the
sale is complete.
option is to walk away. This will also result in foreclosure. A foreclosure
will affect your credit for years to come and you will be unable to purchase
another home for the next 7 years.
You could do
Deed in Lieu of foreclosure. Essentially you give the keys back to the bank and
leave the property in broom clean condition. They will resell the property.
Banks are more apprehensive on this kind of transaction because they assume all
liens in place on the property (second mortgage, unpaid HOA lien, etc) and only
certain types of loans qualify. This is better for your credit than
short sale your home. A short sale is when a property is sold at current market
value for less than the amount of the loan. Your Realtor places the property
for sale for current market value. Once an offer is received and accepted by
you it is submitted to your lender for approval. The bank can approve, counter,
or reject this offer. You will have to submit docs to the lender showing that
there is a hardship. This could be a lost job, decrease in pay, or the value is
much lower than when you purchased the home. There are tax
benefits currently in place that are set to expire on 12.31.12 that allows
taxpayers to exclude income from the discharge of debt on their principal
residence. It takes on average 90 days to complete a short sale so time is
quickly running out. A short sale is better for your credit and you can buy
another home in 3 years. If you were current on your payments the entire time up
to closing you can buy again the very next day.
you discuss your options with an accountant and an attorney. I would be happy
to discuss your options further also to help you determine which option is best
for your situation. There is a real estate attorney that consults with my
office and I would be happy to put you in touch with him. Please do what I best
for you. If you decide a short sale is best I would be happy to assist you.
EXIT Las Vegas