Nevada is well known for its high number of underwater mortgages. In fact it’s the highest in the country and higher than the total amount of housing equity in the state. The good news, though, was that households facing foreclosure had a reprieve. However, according to a new CNN Money article [http://money.cnn.com//2012/04/13/real_estate/foreclosures/index.htm] banks will resume foreclosing on owners not paying their bills. Until recently the national average for the time it takes for a foreclosure to occur was 370 days. That’s about to change, and here are some things you can do about it.
(1) If you haven’t been paying your bills, access your credit report (it’s free) and consult with a financial planner and experienced Las Vegas bankruptcy attorney. If you haven’t been paying or your home is underwater, you have several options:
(2) Just let it happen. This is the worst option. A foreclosure severely impacts your credit worthiness.
(3) Offer your bank the deed in lieu of foreclosure. This is slightly better. The benefits are that a foreclosure doesn’t appear on your credit report, and the bank might cancel your deficiency. Although, it probably won’t.
(4) Short-sell your home. Here, you sell the home to a third party while you and the bank negotiate what happens to the deficiency.
(5) Get a mortgage modification. A modified loan results in a lower interest rate, meaning your have lower payments. Banks facing a defaulted mortgage might not be willing to negotiate in these circumstances.
(6) File bankruptcy. If you haven’t paid on one or more of your mortgages for a while, bankruptcy might be your best option. Once you file, you will benefit from the automatic stay, which halts an foreclosure action against your property, and after a successful Chapter 13 plan, the lien from secondary mortgages is stripped from your home.
It’s possible that you are eligible for some of the $26 billion settlement that the banks promised to apply to underwater properties. If so, consult with a professional to see how that changes your situation. If you’re current on your payments and only slightly underwater, then you may benefit quite a bit. If you’re facing a foreclosure after many months of nonpayment, then bankruptcy might still be a better alternative in the long run.
Strategizing for dealing with an underwater home or one facing foreclosure is a fact-intensive process, which is why you shouldn’t go it alone and hire an experienced Las Vegas bankruptcy attorney to handle your case.
For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Haines & Krieger Las Vegas bankruptcy attorney for a free initial consultation. Call us at 702-880-5554 to set up your free consultation.