Wednesday, June 3, 2009

Lenders Forced to Listen

Posted by: Ryan C. Judson
Land Specialist
775 336 4641

Ryan C. Judson works at NAI Alliance as an associate for the Land Department. His responsibilities include market data mining, researching and tracking distressed properties, and analyzing off-market vacant land opportunities. Ryan received his Bachelor’s of Science in the Business Administration Real Estate Program from San Diego State University in December of 2007. Shortly after moving to Reno in 2008, Ryan obtained his Nevada Real Estate License while working for NAI Alliance and now assists in the acquisitions and sales of vacant land in the Northern Nevada area.

With the number of foreclosures at an all time high, and speculation that the banks are holding onto excess inventory in order to prevent further price drops, the return future for new home developments remains on shaky ground. But, a recent state law, signed by Gov. Jim Gibbons, which takes effect in July, would allow homeowner-occupants facing foreclosures to demand a sit-down mediation with the lenders, overseen by an attorney or a retired judge. At a cost of up to $200, it may be worth it for many who want to save their homes but are having trouble getting their lender’s ear. One component of the law forces the lenders to produce promissory notes, and a deed of trust, showing that the money is owed and that their bank has security on the loan. For some banks, where the note has been sold to a third party or has been taken over by another financial institution, this law could pose a significant threat. It could allow for the mediators to greatly reduce the amount of the loan, allowing the current homeowner the ability to stay put in their house. To read the full article from the Las Vegas Sun, click here.

There is no doubt that for those who are willing to pay the $200 and go through this process that it will in some way slow down the foreclosure process. However, it will remain to be seen whether this new law will actually help these homeowners stay in their houses long enough for the market to return, or if it is just delaying the inevitable.

1 comment:

Anonymous said...

This is an interesting idea. We will indeed find out if this Law actually helps people stay in their homes. Everybody is trying to buy time right now. So even if this new Law creates nothing but time for homeowners to gain control of their mortgages, it will be well worth it. Anything above & beyond that will be an added benefit for homeowners! For $200 I feel the mediated "sit down" between the homeowner - attorney - and lender will be well worht the cost!