Bought a house in 04 for $180,000, now the surrounding homes are going for $80,000. I no longer live in Las Vegas, what are my options?

Asked by Lvseller, Las Vegas, NV Tue Jan 4, 2011

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Helene Moore, Agent, Henderson, NV
Tue Jun 28, 2011
Hi LVseller,
I wrote this blog some time ago maybe this will help.


Future Fannie Mae Loan - Primary Residence

A homeowner who loses a home to foreclosure is ineligible for a Fannie Mae-backed mortgage for a period of 5 years

A homeowner who successfully negotiates and closes a short sale will be eligible for a Fannie Mae-backed mortgage after 2 years

Future Fannie Mae Loan - Non-Primary Residence

An investor who allows a property to go to foreclosure is ineligible for a Fannie Mae-backed investment mortgage for a period of 7 years

An investor who successfully negotiates and closes a short sale will be eligible for a Fannie Mae-backed investment mortgage after 2 years

Credit Score

Score may be lowered anywhere from 250 to more than 300 points. Typically will affect a credit score for over 3 years

Late payments on mortgage will show, and after sale, mortgage is normally reported as "paid as agreed", "paid as negotiated" or "settled." This can lower the score as little as 50 points if all other payments are being made. A short sale's effect can be as brief as 12 to 18 months.

Credit History

Foreclosure will remain as a public record permanently, and on a person's credit history for 10 years or more

A short sale is not reported on a credit history. There is no specific reporting item for "short "sale." The loan is typically reported "paid in full, settled."

Security Clearance

Foreclosure is the most challenging issue against a security clearance outside a serious misdemeanor or felony conviction. If a client has a foreclosure and is a police officer, in the military, in the CIA, security or any other position that requires a security clearance, in almost all cases clearance will be revoked and position will be terminated.

On its own, a short sale does not challenge most security clearances

Current Employment

Employers have the right and are actively checking the credit of all employees who are in sensitive positions. In many cases, a foreclosure is reason for immediate reassignment or termination

A short sale is not reported on a credit report and is therefore not a challenge to employment

Future Employment

Many employers are requiring credit checks on all job applicants. A foreclosure is one of the most detrimental credit items an applicant can have (besides bankruptcy/charge off) and in most cases will challenge employment

A short sale is not reported on a credit report and is therefore not a challenge to future employment

Deficiency Judgment

In 100% of foreclosures (except in those non-deficiency judgment states), the bank has the right to pursue a deficiency judgment

In some successful short sales, it is possible to convince the lender to sign a release and give up their right to pursue a deficiency judgment against the homeowner

Deficiency Judgment (amount)

In a foreclosure, the home will have to go through an REO process if it does not sell at auction. In most cases this will result in a lower sales price and longer time to sale in a declining market. This will result in a higher possible deficiency judgment

In a properly managed short sale, the home is sold at a price that should be close to market value, and in almost all cases will be better than an REO sale resulting in a lower deficiency

Deficiency Judgment (statute of limitations)

In a foreclosure, the first mortgage holder has 6 months to file for a deficiency judgment (the second mortgage holder has 6 years).

If the mortgage holder does not release their right to pursue a deficiency judgment they have up to 6 years to file and seek a deficiency judgment.

Helene M Moore
2 votes
Helene Moore, Agent, Henderson, NV
Tue Jun 28, 2011
." Consider loan modification first. If you are thinking of selling your home because of financial difficulties and you anticipate a short sale, first contact your lender to see if it has any programs to help you stay in your home. Your lender may agree to a modification such as:

• Refinancing your loan at a lower interest rate
• Providing a different payment plan to help you get caught up
• Providing a forbearance period if your situation is temporary

When a loan modification still isn’t enough to relieve your financial problems, a short sale could be your best option if

• Your property is worth less than the total mortgage you owe on it.
• You have a financial hardship, such as a job loss or major medical bills.
• You have contacted your lender and it is willing to entertain a short sale.

2. Hire a qualified team. The first step to a short sale is to hire a qualified real estate professional* and a real estate attorney who specialize in short sales. Interview at least three candidates for each and look for prior short-sale experience. Short sales have proliferated only in the last few years, so it may be hard to find practitioners who have closed a lot of short sales. You want to work with those who demonstrate a thorough working knowledge of the short-sale process and who won't try to take advantage of your situation or pressure you to do something that isn't in your best interest."

A qualified real estate professional can:

• Provide you with a comparative market analysis (CMA) or broker price opinion (BPO).
• Help you set an appropriate listing price for your home, market the home, and get it sold.
• Put special language in the MLS that indicates your home is a short sale and that lender approval is needed (all MLSs permit, and some now require, that the short-sale status be disclosed to potential buyers).
• Ease the process of working with your lender or lenders.
• Negotiate the contract with the buyers.
• Help you put together the short-sale package to send to your lender (or lenders, if you have more than one mortgage) for approval. You can’t sell your home without your lender and any other lien holders agreeing to the sale and releasing the lien so that the buyers can get clear title.

3. Begin gathering documentation before any offers come in. Your lender will give you a list of documents it requires to consider a short sale. The short-sale “package” that accompanies any offer typically must include

• A hardship letter detailing your financial situation and why you need the short sale
• A copy of the purchase contract and listing agreement
• Proof of your income and assets
• Copies of your federal income tax returns for the past two years

4. Prepare buyers for a lengthy waiting period.

Handout from GLVAR
1 vote
Julia St. Ma…, Agent, Las Vegas, NV
Tue Jun 28, 2011
Hello Lvseller.....
Always a smart option to consult with your tax advisor and attorney.....

If you option for property retention then:
~Loan Modification
~Refinance the existing loan
~Leave things the way they are

If you option to relinguish the property then:
~Short sale the property [best solution for owner]
~Deed in Lieu of Forclosure

Should you decide to short sale the property, please feel free to contact me and my professional short sale negotiation team shall be happy to assist.
Thanks and have a great day!

Julia St. Marie, Prof. Corp. RRG, ABR, RSPS
A Trusted Buyer Agent for Las Vegas Real Estate -
Certified REO Specialist
Realty ONE Group
702-355-H-O-M-E (4663) direct

No Costs-No Obligation.....
Be one of the first to know....."Instant Email Notification" of Foreclosed properties --
Look at MLS Inventory—Easy--
0 votes
Len McGuirk, , Las Vegas, NV
Tue Jan 4, 2011
Dear Lvseller:

I hate to be just another response in the crowd of many, however I felt I needed to add my advice and experience in this situation to which it may help you.

It sounds like a short sale is going to be one of the best options for you. I have many clients that are in very similar situations as yours and they were very pleased with the outcome of their short sale. Basically, we would put the home on the market for sale, get an offer, then submit the offer and your financials to your mortgage company for review. Since you are no longer living in Las Vegas, that alone can be somewhat of a hardship since you are now paying for this home and paying to live somewhere else as well. As long as the bank considers you to have a decent enough hardship, your short sale should be a slam dunk.

Just to give you a little bit of background about me, I have been successfully handling short sales longer than most agents even knew what a short sale was. I got in on the short sale industry very early, so my experience speaks for itself. I have been extremely successful due to my knowledge, strategies and contacts with the banks. Most of my short sale sellers are from California and they either have a 2nd home or an investment property here in Las Vegas. Most of my short sales have had the deficiencies waived, even on the investment properties. So you would have a great chance of getting the deficiency waived as well.

Please call me at your earliest convenience. I would be happy to go over the short sale process with you and find out a bit more about your situation. I will give you a ton of advice that I am sure will help you, regardless of what you decide to do.

Len McGuirk, Realtor
Prudential Americana Group
Cell: (702) 203-6688
0 votes
David Cooper, Agent, Los Angeles, CA
Tue Jan 4, 2011
Rents in well located SFR with good sqaure feet are very strong. Good demand and excellant tenants with good qualifications. You can start receiving income within 30 days with a propery management company doing all the work. You will get a tax write off and you can inspect your property in Las Vegas, and write off the expenses as a business trip. I would go for some income now.

David Cooper
0 votes
Danya Gresham, , Las Vegas, NV
Tue Jan 4, 2011
Lots of answers huh? The problem is that since you don't live in the house anymore it is now considered an investment property.

you should make sure you ask whatever realtor you call how many times they've gotten a bank to accept a short-sale on an investment property AND got the bank to waive the right to pursue the deficiency.

also ask them how many and which banks they've dealt with and how many short-sale listings they've actually closed.

Everyone can find the information regarding short-ales and other foreclosure options...YOU need to ask the questions to make sure they actually know what they're talking about...from experience, not just classes.

Good luck and call if you need info.
0 votes
Julia St. Ma…, Agent, Las Vegas, NV
Tue Jan 4, 2011
Hello LVseller....
Best options:
For Home Retention: Loan Modification and rent out.
For sell home: Shortsale with Purchase agreement term for bank to relinquish the deficiency. **

Other options:
Deed in Lieu

If you want to purchase a again....this link is helpful information....…

Should you or your friends/family have any Las Vegas real estate needs or questions, please feel free to contact me at anytime....
Thanks and have a great day!

Julia St. Marie, ABR, RRG, RSPS
Realty ONE Group
Certified REO Specialist
Direct: 702-355-H-O-M-E (4663)
Office: 702-898-0101
Video Newsletter:
0 votes
Lauren Paris, Agent, Henderson, NV
Tue Jan 4, 2011
Short sale! Check out my website for more info and how the process works.
0 votes
Suzie Marqua…, Agent, Las Vegas, NV
Tue Jan 4, 2011
We could do the Rental Comparables and you could rent it if the rent would cover your payment. There are people who try loan modifications to bring the payment down to a manageable amount. There is the option of doing a Short Saleof the property. It all depends on your situation. Your financial position,how many loans there are on the property and what type of loans. If you have a Home Equity Line of Credit (HELOC) as a second loan there are factors with that type of loan that need to be considered. One other alternative that is not very common is a Deed in Lieu of Foreclosure. If there is only one loan on the property there is the possibility of negotiating with the bank to give them the keys and they take the property back. This saves them going through the foreclosure process. Good for them not good for your future credit.
Thank You
Web Reference:
0 votes
Melissa Towb…, Agent, Las Vegas, NV
Tue Jan 4, 2011
You can sell the home. You didn't mention if you have a mortgage on it. Having the home a rental is an option as well.
0 votes
Azim Jessa, Agent, Las Vegas, NV
Tue Jan 4, 2011
I'm sure you know you're not alone in this tough spot. It is fairly typical for Las Vegas. Your options may include Renting your Property, Short Selling, Foreclosure, Deed in Lieu among others. You'll need an opinion from various sources to make sure you make the best decision for you (Accountant, Attorney, and an Experienced Real Estate Agent). I would be glad to be the Real Estate Agent on that list and if you need, can suggest some attorneys and accountants. Again, its a tough spot but my wife and I have helped others through the same situation.
0 votes
Sharon Swant…, Agent, Las Vegas, NV
Tue Jan 4, 2011
Does it have a loan on it? If so, attempt a loan modification first. If that doesn't work, talk to the lender about a short sale or deed in lieu of foreclosure. You could also keep it, rent it out ,and hang on. Eventually, the market will return, although it's looking like a long time right now (10 years probably).
0 votes
Heather Peck, Home Owner, Las Vegas, NV
Tue Jan 4, 2011
I'm afraid you really only have 2 options. You won't qualify for HAFA or most loan modification programs because you no longer live in the house, so you're either going to have to short sale it, or rent it out forever, knowing that it will take 15 years or more for the property to break even as far as equity goes.
0 votes
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