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  • Principal Reductions

    What about Principal Reductions?

    Principal reductions are rare, however they are not impossible.  Principal reductions may occur in several circumstances which are discussed below.

    Your Lender may send you a letter stating that you qualify for a principal reduction, so you should always open your mail.  If you need assistance in filling out the forms, you can always retain our law office to assist you.

    With loan modifications, principal reductions occur when the homeowner is significantly underwater and it is usually an option for those who have low incomes, or those who have interest only loans, adjustable rate mortgages, or those who are underwater and have had a reduction in income or for people who have a unique situation. Some of those unique situations have been where the homeowner basically did a short refinance but borrowed the cash to purchase the house outright at close to fair market value, where there was an issue with the note and possible securitization issues, where the home was infested with mold and had structural issues, and where the home was located in such a remote place that the bank did not want to get the home back.

    Sometimes Lenders will allow the settling of the note or the purchase of the underlying note, however few banks participate. It is a very lengthy process and it is never guaranteed that your Lender will be cooperative.  Purchasing of the note is where you or a third party purchases your mortgage for only a fraction of what you owe on the note.  Some Lenders will do this because they want to get out of a certain area, some Lenders may want to get out of the mortgage business, some Lenders sell their notes when they are viewed as a risky note, or when the borrower has defaulted on the note.  Still other Lenders may have bought your note for pennies on the dollar and just want to make a small profit on the note and are willing to settle the note.  There may be a variety of reasons a Lender would be willing to settle your note.

    Another option is of course stripping the lien through bankruptcy or a cram down in bankruptcy. This is where we see larger sums of negative equity wiped out. Bankruptcy may not be an option for everyone, especially when the mortgage is the only debt.  It is best to seek legal advice when it comes to which option may be the best for you.

    Another program is the Nevada Hardest Hit Funds (NHHF) program. Still in the second quarter of 2012, only 52 principal reductions were given.  At the time of this writing, the Nevada Hardest Hit Funds (NHHF) has decided to cease accepting applications, because they are assessing how much funding they have so as to not over commit and they have also ceased accepting applications because they are working with the backlog of applications they currently have.

    Second lien stripping is usually an easier route, but the Lender still must participate in this program.

    For our past client results click here!

     

    Another avenue is to reduce a mortgage balance through foreclosure mediation; however it is very rare to see principal reductions in foreclosure mediations.

    Van and Associates Law Firm has helped many in the Las Vegas and Henderson community with foreclosure, short salebankruptcydebt settlementloan modification, and personal injury.

    Please feel free to contact us today so that we may discuss the options that are available to you.

    Van and Associates Law Firm at 702-529-1011

    Las Vegas Loan Modification Attorney

    Are you unable to make your mortgage payments? Are you facing foreclosure?

    For many people, a loan modification offers the best option for dealing with financial hardship. A loan modification is a permanent change in the terms of the original mortgage contract in order to provide more favorable mortgage terms to the homeowner and allow the homeowner to stay in the home.

    Benefits of Loan Modification:

    • Reduced monthly payments
    • Reduced principal
    • Reduced interest rates
    • Delaying the foreclosure process

    Qualifications for Loan Modification:

    • Divorce
    • Loss of employment
    • Disability
    • Death of a spouse
    • Illness
    • Military relocation
    • Reduction in income

    How the Nevada Loan Modification Lawyers at Van and Associates Can Help

    At Van and Associates, our Las Vegas financial distress lawyers have considerable experience helping clients with loan modifications, in addition to bankruptcy, short sale, debt settlement, and the Foreclosure Mediation Program. We offer a number of loan modification services, including:

    • Creating a modified loan repayment plan
    • Preparing and reviewing loan documentation
    • Negotiating more favorable loan terms through the Nevada Foreclosure Mediation Program, through the Nevada Hardest Hit Funds Program, or directly with the lender
    • Lowering monthly payments
    • Lowering interest rates
    • Extending  the repayment period
    • Reducing the loan balance
    • Obtaining a waiver of past due interest
    • Obtaining a removal of second lien on the property
    • Reducing principal
    • Renegotiating commercial mortgage loan terms

    Contact us at (702) 529-1011 to schedule a free consultation to learn more about loan modification options.

     

    Contact Us for a Free Consultation

    Contact the Las Vegas bankruptcy law firm of Van and Associates at (702) 529-1011 to schedule a free consultation to discuss your legal options, including bankruptcy, short sales, foreclosure, and debt settlement.

    Please feel free to contact us today so that we may discuss the options that are available to you.

    Van and Associates Law Firm at 702-529-1011

    Short Sale Attorney

    Group of house icons with a sign sold on one of them

    Group of house icons with a sign sold on one of them

    Homeowners who sell their home through a short sale, get their principal balance reduced, or lose their home to a foreclosure may face tax consequences due to the cancellation of debt. However, there are ways to minimize, reduce, or avoid the tax consequences if you fall under certain categories. […]

    When Do I Need to Move?

    When Do I Need to Move?

    If you have fallen behind on your payments, and a bankruptcy is filed, this stops the foreclosure temporarily.  Your Lender will have to file what is called a Motion for Lift Stay to seek the Bankruptcy Judge’s permission to continue with the foreclosure process.  If you are filing a Chapter 7 Bankruptcy, and you do not want to resume making your mortgage payments, the Motion for Lift Stay will likely be granted and the foreclosure process will resume where it left off.

    So if you had a Notice of Sale/Trustee Sale Notice/Election to Sell, then your Lender will probably set a new date for the foreclosure sale and provide you with new Notice.  If your house is ultimately sold on that date, provided that your Lender does not postpone that sale date and sell your home at a later date, you still may still be able to live in your house if you work out something with the new purchaser of your home.

    The new purchaser may give you cash for keys, which is moving money or relocation money, or they may give you an extra month or two for you to move out.  To learn more about the foreclosure process, click here

     

    If you decide to file a Chapter 13 Bankruptcy, you may be able to catch up on your mortgage payments by paying through your Chapter 13 plan.  However, if you do fall behind on your payments, or decide you no longer want to keep the home, the Lender will have to follow the process above to foreclose on your home.

     

    Other Home Options Include

     

    Van and Associates Law Firm has helped many in the Las Vegas and Henderson community with foreclosure, short salebankruptcydebt settlementloan modification, and personal injury.

    Please feel free to contact us  today so that we may discuss the options that are available to you.

    Van and Associates Law Firm at 702-529-1011

    Stop Home Foreclosure

    Can Bankruptcy Stop Foreclosure on My Home?

    If you have fallen behind on your payments and are facing foreclosure, filing for bankruptcy can stop foreclosure on your home temporarily or allow you to catch up on your payments. Once the bankruptcy is filed, all creditors, including your mortgage company, must cease collection efforts. Your mortgage company would basically have to file a Motion to Lift Stay and seek permission from the Bankruptcy Court to proceed with the foreclosure. You would have to basically resume making your mortgage payments to keep your home in a Chapter 7 Bankruptcy, or you risk losing your home if the Bankruptcy Judge grants the Motion to Lift Stay.

     

    You may be able to catch up on your missed payments if you file a Chapter 13 BankruptcyBankruptcy does not wipe out your mortgage. The only exception to wiping out a mortgage is wiping out a second wholly unsecured mortgage (a second wholly unsecured mortgage is a second mortgage that has no equity) or a cram down of investment properties in a Chapter 13 Bankruptcy. Sometimes, however, the mere fact that you have filed bankruptcy can be leverage for you to negotiate with your Lender for different mortgage terms.

     

    Can I Keep My Home and Automobile?

    In many cases you can retain your home and automobile in a Chapter 7 Bankruptcy proceeding so long as you are current with your loan or work out a payment plan with your Lender and continue to pay on your home or automobile. If you are successful in obtaining a discharge of your unsecured debts, you can allocate the money you would have paid to your unsecured creditors to your mortgage lender or car lender. If the home or automobile has equity in excess of the allowed exemption amount, you might want to consider filing a Chapter 13 petition, which allows you to develop a plan for repaying your creditors without necessarily liquidating your assets.

     

    Other Home Options Include

     

    Van and Associates Law Firm has helped many in the Las Vegas and Henderson community with foreclosure, short salebankruptcydebt settlement, loan modification, and personal injury.

    Please feel free to contact us today so that we may discuss the options that are available to you.

    Van and Associates Law Firm at 702-529-1011

    Why Hire an Attorney

    Why Hire an Attorney?

    An attorney can tell you what your legal options are, whereas a real estate agent cannot provide you with legal advice.  In some circumstances, you may be better off filing bankruptcy if you have a lot of debt besides your home (such as credit card and medical bills). Short selling a house may actually hurt you because you may need the house payment to bring down your income to qualify for a Chapter 7 Bankruptcy. An attorney can tell you the ramifications if you foreclose and can tell you the collection laws and why you should not foreclose. An attorney can also tell you which assets are exempt from collection and what should and should not be listed on financials or what is exempt from collection if you get foreclosed on.

    An attorney can review your short sale approval letters and tell you if you are protected from future collection actions. An attorney may be better able to negotiate on your behalf to get a lower settlement amount, or to obtain a waiver of deficiency.

    Furthermore, you want someone to review your documents prior to submitting them. It is hard to undo something once it is submitted incorrectly.  In addition, it can greatly impact the amount the Lender requests as settlement. Our law firm has the necessary staff to properly process your short sale, so you can always rest assured that your short sale is in good hands when you retain our law firm and use us for your Realtor, you are getting an experienced team on your side.

    Our law firm can give you your options and the difference between short saleprincipal reductionloan modification, foreclosure, and bankruptcy.

    In some cases, but not in all cases, a real estate agent may not have the sufficient time or help and resources to properly follow up on the progress on your short sale. Some real estate agents may have a staff, but please make sure you hire someone who can properly follow up on your short sale so the house does not go into foreclosure. God forbid your documents are not submitted in a timely manner and your house goes into foreclosure.

    Whether you are behind on your mortgage payments, or severely underwater, please give our law offices a call.

    This is a big financial decision, dealing with hundreds of thousands of dollars. You do not want any problems and you do not want your house foreclosed on or a deficiency hanging over your head. If you were going to get surgery, would you research the best doctor or do it yourself?

    Once you have received a Notice of Default, it is imperative that you quickly call us, because the time has started ticking with regards to when your property will be foreclosed upon.

    We will assist in the following:

    • Getting your Realtor’s commissions paid so you can save money in short selling your home, vacant land, or commercial property.
    • Attempting to get the deficiency waived, so the bank cannot come after you in the future.
    • We will attempt to get relocation money in your pocket.
    • Negotiating an acceptable settlement with you and the bank.
    • Assist you in saving negative equity.

     

    Click Here for examples of short sales we have done in the past!

     

    Van and Associates Law Firm has helped many in the Las Vegas and Henderson community with foreclosure, short salebankruptcydebt settlement, loan modification, and personal injury.

    Please feel free to contact us today so that we may discuss the options that are available to you.

    Van and Associates Law Firm at 702-529-1011

    HAFA & HAMP

    Government Programs

    Home Affordable Foreclosure Alternative (HAFA)

    HAFA is a program that helps transition homeowners out of their troubled mortgages by helping to facilitate a short sale or a Deed-in-Lieu (DIL) of foreclosure. HAFA is the Home Affordable Foreclosures Alternative Program that is government sponsored. Fannie and Freddie Mac backed loans qualify for HAFA as well as 100 other participating servicers. Your bank may or may not participate.

    • Requires borrowers to be fully released from future liability. (No cash contribution, promissory note, or deficiency judgment is allowed).
    • You may get $3,000 for borrower relocation assistance.

    The first mortgage may contribute to pay off a settlement to your second mortgage of $2,200 or 3% up to $8,500.

    1. You have not purchased a home in the last twelve months. Sometimes, the servicer will look past this if you relocated for employment.
    2. Principal balance CANNOT be over $729,750.
    3. Homeowner must either be delinquent or very close to delinquency on their mortgage or suffer from a significant financial hardship.
    4. Your loan must have originated before January 2009.

     

    Home Affordable Modification Program (HAMP)

    The goal of the program is to modify the loans of millions of homeowners in an effort to make homeowner`s mortgages more affordable and keep homeowners in their homes.

    Homeowners must meet the following criteria in order to qualify for HAMP:

    1. Homeowner must either be delinquent or very close to delinquency on their mortgage or suffer from a significant financial hardship. If it is a rental property, you would have to be delinquent.
    2. The home can be a rental home or the homeowner`s primary residence.
    3. Mortgage was originated prior to January 1, 2009.
    4. Principal balance CANNOT be over $729,750 if it is a single unit property, $934,200 on a 2 unit property, $1,129,250 on a 3 unit property, or $1,403,400 on a 4 unit property.
    5. You have to show that you can afford to make the modified payments.

    If the homeowner qualifies for HAMP, the Lienholder attempts to structure the homeowner`s mortgage to be 31% of the homeowner`s gross monthly income.

    There are three steps Lenders typically take to achieve the 31% threshold.

    1. First, the Lender attempts to reduce the interest rate on the mortgage down to as low as 2%.
    2. If that does not get the homeowner`s mortgage payment below 31% of the homeowner`s gross monthly income, the Lender extends the loan up to 40 years.
    3. Lastly, and only if necessary, the Lender may defer a portion of the balance and then request that portion of the principal as a lump sum payment at the end of the loan.

    Incentives:

    • $1,000 incentive for homeowner who successfully completes the trial period.
    • Up to an additional $1,000 of annual incentive for each year the homeowner stays in the program.
    • Homeowners may be able to receive annual principal reduction LINK TO PRINCIPAL REDUCTION for up to five years.
    • Late fees may be waived, if the homeowner completes the trial program.

    Incentives of Short Selling

    Benefits of a Short Sale Rather Than a Foreclosure

    There are several advantages to doing a short sale rather than modifying a loan or allowing a home to go into foreclosure:

    • In many cases it may take years of mortgage payments before your house is worth what you owe. Most mortgage payments on a home loan only cover the interest in the beginning before touching the principal.
    • Some people have a payment that is going to adjust higher in the future. Many people have chosen to get out of these unfortunate situations by pursuing a short sale. (More than 20 years until home prices reach pre-bust levels, Moody’s says)
    • A short sale has the potential to bring a new buyer into the property immediately. This avoids foreclosure signs, dangers to the neighborhood of having vacant and non-maintained properties that may become targets to vandalism or squatters.
    • If you short sell while current, your credit is usually not as affected. Most of our clients report their credit score fell only 15-30 points if they were current on their mortgage payments. The short sale will be reported as a “debt settled less than the full amount”, “account paid in full for less than full balance”, “paid as agreed, paid as settled”, “negotiated”, “paid in settlement/never late or account legally paid in full for less than full balance”. You can also purchase a house sooner, and in some cases right away. Click here to see examples of short sales we did when the seller was current, and how their credit was affected.
    • It will not be in the public records that you were foreclosed upon.
    • Credit and loan applications ask whether or not you have had a foreclosure. Currently, credit and loan applications do not ask if you have short sold your home. As such, you may be denied credit (credit cards and loans) if you have a foreclosure on your record, however a short sale is better for your credit.
    • You will be able to qualify for a loan sooner and buy a home sooner if you short sell your home rather than foreclose.
    • If you are delinquent when you short sale, your credit score will not be as affected as if you were to foreclose. Usually a foreclosure takes longer, so the longer you are late on your payments the more your credit score is affected. If you short sell while delinquent, your credit score will probably drop 50-80 points per loan that you are delinquent on. The credit score effects of a foreclosure may be 3 years, whereas the credit score effects of a short sale are 12-18 months.
    • If you foreclose and hold a high security position, it may affect your employment, so this is another reason to short sell rather than foreclose.
    • You can negotiate a deficiency waiver away in a short sale, whereas if you foreclose, the lender can pursue you for a deficiency judgment and garnish your wages, lien your property and freeze your bank accounts.
    • Since the market is taking a turn and prices are going up and interest rates may also go up, a short sale will allow you to buy quicker than if you foreclose. You do not want to be priced out of the market and missing the opportunity to purchase at a lower price.
    • In some cases you may be able to get paid by your lender to do a short sale. In some cases, our clients have received $3,000 to $33,000 in compensation for just short selling their house.(Click Here for Details)

    If you’ve had a financial hardship such as reduced income or increased living expenses there are also short sale alternatives.

    • You can request a loan modification that has the possibility of reducing your principal and/or removing a second mortgage, enabling you to keep your home with a reduced loan balance.
    • You can voluntarily give title of your property to the mortgage Lender in exchange for forgiving your mortgage. This deed in lieu of foreclosure is an exit strategy that can avoid the foreclosure process and have less impact on your credit score. This is very rare as banks do not normally grant deed’s in lieu of foreclosure unless all your options have been exhausted.

    Van and Associates Law Firm has helped many in the Las Vegas and Henderson community with foreclosure, short salebankruptcydebt settlementloan modification, and personal injury. Please feel free to contact us today so that we may discuss the options that are available to you.

    Van and Associates Law Firm at 702-529-1011

    Hire Our Real Estate Team

    Why You Should Hire Van and Associates Law Firm in Conjunction With Working With Our Real Estate Team?

    You can always retain our law firm and work with a real estate agent of your choice. You are never under any obligation to use our law firm and use us as your real estate agent.  However there may be a benefit to using us as your real estate agent as well as retaining our law firm to negotiate the short sale of your property.

    Sandy Van, Esq. is a licensed Realtor and broker salesperson who is a Certified Distressed Property Expert, trained in short sales. As an attorney and a Realtor, she has worked on every angle of the housing market from doing collections, bankruptcy, working with HOA liens and NRS 116.3116, working with title companies with regards to reviewing and revising the HUDs, and working in real estate.

    She has negotiated numerous short sales and she knows the bank forms, what should be on a financial statement, hardship letterHAFA forms, Freddie Mac forms, and the ins and outs of the software used to negotiate short sales. She knows what assets are exempt, what is going to happen if the client does not obtain a waiver of deficiency and is garnished in the future and if the deficiency judgment is recorded against them.

    Sandy knows when a short sale is not in her client`s best interests because they need the secured house payment to bring down their income to get into a Chapter 7 Bankruptcy. She has negotiated HOA liens in the past with Red Rock Financial, NAS and many of the other HOA collection companies. She also knows when her clients are able to buy if they foreclose or when they can buy if they short sale while current. There may be a benefit to you, the homeowner, having someone on their side that has this type of knowledge and knows the effects and ramifications of each option you may choose to pursue.

     

    One Stop Shop For All Your Real Estate and Legal Needs

    The real estate services that we provide include:

    • Listing the property on the MLS, Trulia.com, Zillow.com, Homes.com and Realtor.com to ensure that your property gets maximum exposure.
    • Showing your home to prospective buyers, including open house showings.
    • Coordinating showings with agents, buyers, repairmen, inspectors, and appraisers if you are unavailable or reside out-of-state.
    • Coordinating the closing process with escrow, HOA companies, and the Buyer`s Agent.

     

    Another avenue is to reduce a mortgage balance through foreclosure mediation; however it is very rare to see principal reductions in foreclosure mediations.

    Van and Associates Law Firm has helped many in the Las Vegas and Henderson community with foreclosure, short salebankruptcydebt settlement, loan modification, and personal injury.

    Please feel free to contact us today so that we may discuss the options that are available to you.

    Van and Associates Law Firm at 702-529-1011

    Loan Modifications

    What About Loan Modifications?

    If you are facing foreclosure and your mortgage payments are too high, a loan modification might be your best option. A loan modification is a permanent change in the terms of the original mortgage contract. Typically, the loan modification’s purpose is to allow the homeowner to obtain more favorable mortgage terms and stay in their home. When qualifying for a loan modification, Lenders are looking for the homeowner’s hardship and ability to pay the modified payment terms.

     

    The loan may be altered in the following way:

    • Interest rate reduction
    • Extending the length of the loan (e.g. extending the mortgage payoff from 30 years to 40 years)
    • Change the type of mortgage (e.g. ARM to Fixed)

     

    Why a Modification May Make Sense

    • Principal reduction
    • Reduced monthly payments
    • Reduced interest rates
    • Delaying the foreclosure process

     

    Qualifying for Loan Modification

    Some of the common hardships that Lenders look for when granting a modification:

    • Divorce
    • Loss of Employment
    • Disability
    • Death of a Spouse
    • Illness
    • Military Relocation
    • Reduction in income
    • You can’t afford your payments, but can afford a modified payment.

     

    These are some of the loan modification services that we offer:

     

    Do not just agree to a loan modification with an unaffordable payment, you will simply run through your savings, leading to you having no money and no house. Do not agree to a loan modification program that forces you to liquidate your retirement funds such as 401Ks and IRAS in order to make mortgage payments on a house that you ultimately cannot afford. The goal is not just to keep your house, but to have an affordable payment so that you can keep your house over the long term. Be realistic with what you can afford.

    In most circumstances, a loan modification will not help a borrower, because it is a temporary band-aid for a larger issue. The average home appreciation in Las Vegas is 4% per year, if your home is, for example, currently worth $100,000, but you owe $200,000, it may take you 20 years to break even assuming $4,000 in appreciation based on simple math (this is not even taking into account compound interest). So you would essentially be renting for the next 20 years. 

    In some cases, some of the attorneys that we have relationships with have been able to reduce principal, but this is on a case by case basis and very rare. Please call us to set up an appointment with an attorney to discuss your options with regards to loan modifications.

    Whether you are considering a loan modification or pursuing a short sale, you may also be a good candidate for the Nevada Foreclosure Mediation Program.

     

    Van and Associates Law Firm has helped many in the Las Vegas and Henderson community with foreclosure, short salebankruptcydebt settlement, loan modification, and personal injury.

    Please feel free to contact us today so that we may discuss the options that are available to you.

    Van and Associates Law Firm at 702-529-1011