Las Vegas Home Foreclosures: Alternatives

Many American families have had immeasurable suffering from the current housing market and the financial crisis that is challenging our nation. Clark County Nevada has been one of the hardest hit areas of the country with a very high foreclosure rate.

Before you decide on foreclosure, which can be one of the most devastating financial choices a person might face, the following are some alternatives worth considering. These could help reduce the impact on your credit scores that come with foreclosure and help you get back into the housing market in a more timely fashion.

Alternatives to keep your property:

• Restructure – Your lender might be able to work with you by giving you a fixed amount of time to repay the amount you are behind. This might be achieved by adding a portion of what is past due to regular payments. This option would be good for those that have only missed a small number of payments.

• Refinance – This option would require the property owner to have income, equity and credit so they can support a new mortgage. With your new loan your monthly payments might be reduced depending on the interest rate.

• Forbearance – The goal of mortgage loan forbearance is help you get your property payments reduced or suspended for a period of time that you and your lender have agreed to. Then you resume your regular payments, along with a lump sum payment or additional partial payments to bring the loan current. This might be a good option if your income is temporarily reduced and expect to go back to your full income shortly.

• Short Refi – Your lender might agree to refinance the property with a reduction in the principal balance. You will be asked to provide proof of hardship and also have your ability to pay the new mortgage fully documented.

• Loan Modification – The property owner and the lender agree to permanently change the terms of the mortgage contract that makes your payments less of a hardship on you. This might include extending the terms of your loan, reducing interest rates, or adding missed payments to your loan balance.

• Rental of your property – A property owner can convert their property to a rental if they have a low enough mortgage payment that can be covered by rental income.

Alternatives to leave your property:

• Sale of property – Depending on the real estate market and if there is sufficient equity in the property, selling might provide the funds to pay off your current mortgage in full.

• Short Sale – You can hire a real estate agent that is experienced in short sales and can negotiate with your lender. This option is for those homeowners that owe more on the property than the current market worth. You must be able to prove financial hardship to qualify for a short sale.

• In lieu of foreclosure you transfer your deed to your lender – In most cases the property owner must attempt to sell the property for fair market value first (at least 60-90 days) before your lender will consider this option

• Bankruptcy – Personal bankruptcy is considered the last resort of debt management. Bankruptcy stays on your credit report for 10 years and can affect your getting a job, buy another home and get credit. However this legal procedure might provide a new start for those that cannot comply with their debts.

The Smith Team will be able to guide you through all the above alternatives and we recommend you discuss all options with a qualified attorney.

Beware of mortgage fraud, loan assistance scams and other common schemes. Dealing with the possibly of not being able to make the payments on your property is already difficult. Unfortunately scam artists try to take advantage with all types of fraudulent deals.