If you're a Las Vegas homeowner with financial problems that you expect to overcome soon, you may have a different agenda than someone who sees selling their home as the only way to escape foreclosure. Assuming your home is one you like, want to keep, and can afford, talking with your lender in time of need may reveal a number of options. Foreclosure is costly for lenders, so if you approach them in a timely manner, they may be willing to provide some temporary relief or "workout" for the problem.
Most people these days know the big three weapons that lenders use to prevent further loss but there is a lot more in the lenders' arsenal than foreclosure, short sale or deed-in-lieu. Less final remedies for troubled homeowners include modifying the length of the loan or the interest rate, waiving penalties and fees, deferring payments to the end of the loan and making it longer, applying past due amounts to the loan balance and slightly increasing each monthly payment, hold a fixed rate on a loan ready to adjust, lengthen an introductory payment or interest rate, or even granting temporary forbearance to stop the payments.
Banks, not being social service agencies, do not widely advertise this "softer" side; in order to bring it out and allow a workout, you need to make a good case for yourself to make the lender confident that this will stop further loss. As is true with all credit issues, contact your lender at the first sign of trouble. Your steps might include:
• Explain why you are in trouble and why you think the problem is temporary. If a change in the interest rate is causing your payment to adjust upwards, you need to show evidence you paid in a timely manner before change. If your problems were caused by job loss, illness, or family circumstances, you need to show that it is likely you will have a job soon or that the crisis has passed.
• Show proof that you have been trying to work things out on your own, through job hunting, part time jobs, or by reducing your living expenses.
• Present a specific proposal to the bank, with alternatives, both verbally or in writing. If you do not know what to propose, you might seek ideas from a non-profit housing counselor, a real estate attorney, CPA, or other qualified source. A typical request might suggest lengthening the loan, making it fixed not adjustable, and lowering the interest rate. If your proposal will lower your payment by $500 per month, you need to show how this will help you catch up and be on time in the future. What will sweeten the pot if you are way behind is to present least a month's payment.
Good preparation will increase the chance that the lender will accept your proposal.. Make sure to discuss with the lender representative how the new agreement will affect your credit record. Your goal is to have your new payments reported to the credit bureau as "Pays as agreed, " but make sure you understand the credit ramifications before you finalize the terms.
Have a complex real estate situation? Yonas Woldu can help. For help with selling or buying property in Las Vegas, Green Valley, or other areas of Clark County, contact Yonas Woldu at Prudential Americana Group. I can help you find alternatives. If you are looking to purchase a short sale or bank owned home, visit Vegas Real Property website and my new AskYonas website.
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