Is Bank of America going to start foreclosing on Nevada Homes through the Judicial Process?
Posted by Paul Francis on Thursday, December 29th, 2011 at 1:07am.Is Bank of America Going to the Judicial Process to foreclose on Homes in Nevada?
I went to a Foreclosure Mediation last week with some clients to sit down with Bank of America to have it agreed upon for a short sale approval up front with a set price in order to avoid the wait around time to have a short sale approved once we have a buyer. The vast majority of Las Vegas short sales are cancelled by buyers because of waiting around for so long for the sellers lender to appove the short sale so I do whatever possible to get the price that a lender wants right up front. For example, this Las Vegas short sale I have for sale has an approved price of $130,000 and the lender has already stated that the sellers qualify for a quick answer / approval once we have a buyer.
It was quite an interesting conversation with the Attorney representing Bank of America and according to him, starting 01/01/2012 and because of AB 284 that was passed on 10/01/2011, Bank of America is just going to opt towards the Judicial Foreclosure Process for all of it's delinquent home loans and according to him:
"Avoid the whole foreclosure mediation process and speed up the process."
This is going to get interesting..... Being a former Real Estate Broker in Illinois / Chicago where lenders foreclose on homes through the Judicial Process, I have a pretty good understanding of just how long it is taking to foreclose on homes in Chicago. Far longer then the Non-Judicial Process that until now, 99% of the foreclosed homes in Nevada were going through. New York, New Jersey and Florida also use the judicial process to foreclose on homes and they have the longest average time it takes to foreclose on a home in the nation.
The key thing to note on all of this is that for right now, I only know of Bank of America that will be opting for the Judicial Process in Nevada. In states such as New York, New Jersey, Florida and Illinois --- just about all Lenders have to go through the Judicial Process. So for right now, there is no telling if the Foreclosure Process for Bank of America going this route in Nevada is going to speed up the process .... or if the Nevada court system is going to get bogged down as the long list of delinquent home loans get processed through the courts.
However.... according to the Attorney representing Bank of America at the Foreclosure Mediation I went to, everything (loan modification offers and short sales) is going to be taken off of the table once it's time to show up at court. So basically, the delinquent home owner is going to get their notice to show up for court and the representatives of Bank of America are going to be showing up with all of the documentation needed to foreclose on the home and will not be showing up to work out any deals.
Foreclosure Mediation was a Success....
The information alone was well worth going to the foreclosure mediation and we have a price that we now know Bank of America will accept for a short sale approval so we don't waste a buyers time. We'll be going through the HAFA Short Sale route to get the sellers $3,000 in relocation assistance with the lender having NO future Deficiency Judgement Rights to pursue the sellers for the loss that the lender is going to take.
The Representative said we had plenty of time even though Bank of America was going to switch to the Judicial Foreclosure Process since there were NUMEROUS home owners they were going to be processed first that have not paid their mortgages far longer and those will be the first in to clear out. His estimate was about six months so we'll see.
Regardless though, he made it sound like that Bank of America is not going to be playing any games starting January 1st. Like AB 284, it's going to take some time to see how switching to the Judicial process to foreclose on homes is going to play out.
One thing is certain though, even though the foreclosure process may have been changed and the Notice of Defaults have slowed down for now.... they are still on the way.
As the Representative for Bank of America said:
The value of the home in question is so upside down that the value is not going to be coming back anytime soon. Even if it does in a couple of decades, the cost of paying the mortgage is going to cost far more and the savings that could be seen by moving on is far higher.
It's one of those situations that even leasing out a property is far cheaper then the lowest modification amount that could be offered.
For Las Vegas Home Sellers
Confused Yet? No worries.... all of the changes and things taking place behind the scenes is even confusing for the vast majority of real estate agents. Especially when you follow the news and have journalists commenting on things they really don't have too much of an idea about. It's basically become a full time job just keeping track of all the economic conditions taking place, seeing what happened to other states when they changed their foreclosure process, dissecting the PR campaigns and discussing opinions of what is going to happen to the Las Vegas real estate market.
Because Opinions are all that they are at this point. One thing that can be pretty much agreed on though, the Las Vegas home values seen back in 2006 are not coming back for a long, long time. Lax lending standards, exotic loan products and the huge amount of speculators buying mulitple homes pushed Las Vegas home values to unsustainable levels. Even if the lenders were to go back to that same lending enviroment, the current economic conditions would still make it virtually impossible for people to be able to handle high mortgage payments for any length of time.
For Las Vegas home owners that owe far more then their home is worth and can't make their mortgage payments, feel free to contact me to discuss the short sale option. Short sales are a case by case scenario and there are so many factors involved that must be evaluated because there is NO one set solution that applies to every homeowner.
All you have to do is call 702.592.3058 or fill out my Las Vegas Short Sale Form for a free consultation.
Paul Francis
Prudential Americana Group, REALTORS
Las Vegas Short Sales
702.592.3058
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awesome post! Keep up the good work!
Posted on Friday, February 3rd, 2012 at 9:43 AM.