In previous posts, we’ve talked about the benefits to Las Vegas residents of Nevada’s foreclosure mediation program (NRS 107.080) here, here and here. The gist of it being the new law allows homeowners who received a foreclosure notice after June 30, 2009, to request a mandatory mediation session with their mortgage lender.
Here’s one more reason the law was the right move by Nevada: It turns out banks and mortgage lenders actually have an incentive to delay the foreclosure process because they collect generous fees along the way.
“Lucrative Fees May Deter Efforts to Alter Loans” was the headline in last week’s New York Times investigative piece. And in interviews with former employees from mortgage lenders, the article describes in detail how mortgage companies continue to collect various fees for things like insurance, appraisals, title searches and legal services from the pools of home loans while homeowners dangle in foreclosure limbo. The mortgage companies collect these fees regardless of the outcome, so it doesn’t matter to them what ultimately happens to the home or the people who live in it.
Also, the mortgage companies are often owned by the banks and mortgage lenders, or they have profit sharing arrangements with them, according to the article. In contrast with the Making Homes Affordable program, which offers $1,000 incentives to banks to enter loan modifications with homeowners, the fees from delaying foreclosure are much more profitable.
This article further confirms the fact that the Nevada did the right thing when they passed the most aggressive legislation of any state so far to try and help homeowners negotiate loan modifications with their banks and lenders.
Our first foreclosure mediation sessions under the new Nevada mediation law are coming up in about 60 days. Stay tuned to the Haines & Krieger blog as we’ll continue to monitor and write about this important topic.
In the meantime, if you’re a Las Vegas homeowner and need to stop foreclosure and you’re in need of good bankruptcy attorneys in Las Vegas or you’re looking for bankruptcy information in Las Vegas, then get in touch with us to set up a free initial foreclosure mediation consultation. We’ll sit down and provide the Las Vegas bankruptcy help you need, explaining all the options and strategies that will help you move forward with your financial life.