Nevada Real Estate Outlook Hinges on Short Sales

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Nevada Real Estate Outlook Hinges on Short Sales

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Here is the case of another Federal government program designed to help Nevada homeowners and, guess what, it did virtually nothing to help.

The $75 billion Home Affordable Mortgage Plan likely did not work in Nevada because there are so many homeowners owing significantly more than their home is worth.

Due to the sheer number of Nevada homeowners who are upside down in their mortgages, most did not qualify for the government's program. In fact, less than 2 percent of those who did qualify for the program saw an actual reduction in their principal balance.

Perhaps Nevada, and particularly Las Vegas, is such a unique real estate market the plan never really had a chance. Or, could it be the program was a typical government scheme with rules and regulation so stringent few homeowners could even qualify?

Adding more confusion to an already complicated situation, the FTC recently announced that in Nevada, all loan modification companies are banned from charging up-front fees. A more likely scenario as why this program failed is that participation by banks was totally voluntary and, as you might guess, not many banks participated because they could not up-front fees.

So if you own a home in Nevada and find yourself owing more than the home is worth, what can you do? Right now may be a great time to look into a short sale. A short sale involves a bank allowing the homeowner to sell their home for less than what is owed on the mortgage.

Some homeowners are concerned that in a short sale situation, the lender is allowed deficiency judgments. Technically the holder of the first mortgage has six months to file for judgment and secondary lien holders have six years. Most major banks have wording in their short sale approval letters that waives their right to pursue deficiency actions.

The best advice if you find yourself in this position, is to first talk to your lender. Remember, selling a home for less than the loan amount is not an admission of failure; it is a business decision.

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Tags: • mortgage • loan modification • selling a home • real estate market • homeowners • short sale • nevada • real estate forecast • real estate agents • las vegas real estate •

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