Nevada Foreclosure Mediation Program
The Nevada Foreclosure Mediation Program is worth investigating if you're a homeowner and resident of the state and in need of foreclosure prevention assistance. Thus far, this program has helped nearly 8,000 property owners avoid foreclosure through loan modification, mortgage refinance, and foreclosure alternatives.
To take advantage of the Nevada Foreclosure Mediation Program requires homeowners to be proactive the moment they receive a Notice of Default from their bank. This program requires homeowners to remit an application within 30 days from the date they receive the notice.
The cost to participate in this program is $200. This covers the cost of mediation services and can expedite the approval process. Anyone who has attempted to work with their lender to stop foreclosure knows how challenging it can be to talk to a helpful person. Using mediation services forces lenders to engage in conversation to resolve the issue.
When homeowners apply for mediation services under this program their lender is required by Nevada state law to enter into negotiation within 135 days from the date they receive borrowers' requests. Lenders share in the cost of mediation and are also required to pay $200.
Loan modification is a good option for people that have experienced financial problems, but are on the road to recovery. When a loan is modified the payments are reduced by lowering the interest rate or extending loan terms.
Mortgage refinance is offered to homeowner's that have an adequate FICO score to qualify for a new loan. Homeowners will need to have sufficient funds to pay loan application fees, property appraisals, home inspections, and closing costs.
If Nevada homeowners don't qualify for modification or refinance, their lender can offer foreclosure alternatives of real estate short sales or deed in lieu of foreclosure.
When banks provide short sale approval, property owners list their home through a realtor for less than the amount due on the loan. The short sale process varies by lender, but most require homeowners to have a buyer in place and sell the property within a few months. Otherwise, the property could end up in foreclosure.
Deed in lieu of foreclosure requires homeowners to give their house back to the bank. The only benefit of this option is that borrowers avoid having to endure the foreclosure process.
Homeowners that enter into either of these options need to determine if their bank accepts the short sale or return of property as payment in full toward the loan balance. Most banks require property owners to pay deficiency amounts between the sale price and loan balance.
If homeowners are incapable of paying deficiency amounts in full, lenders can obtain a deficiency judgment which is reflected on credit reports until it is paid in full. This can result in reduced FICO scores and prevent borrowers from qualifying for most types of credit.
Working with mediators can help borrowers determine which options are best suited for their needs and minimize risks of acquiring deficiency judgments. Homeowners that apply for help through Nevada Foreclosure Mediation Program aren't guaranteed loan modification or mortgage refinance. However, their lender is required to work out a plan that can minimize the effect of foreclosure.
While the Nevada Foreclosure Mediation Program is a good option, homeowners should investigate all available foreclosure prevention programs including Fannie Mae Loan Mortgage Programs and Making Home Affordable. Additional information about these options is provided in our foreclosure prevention article library.
Published on December 14, 2011 at 03:04 AM