Mortgage Servicing Fraud
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The 5 Periods in a Nevada Foreclosure (and interesting steps banks are doing to avoid them!)


 

Market Conditions for
Las Vegas, NV

Reported By
Katie James

As of 12/11/2007

Contact me for more info!


5 Steps in Nevada Foreclosure: What every real estate investor should know!

Period 1:
The period between the time the Trustor's defaulted on the debt obligation and the recordation and mailing of the Notice of Default.

Bankruptcy Filed: The Notice of Default cannot be recorded during this time period.


Period 2:
Commonly referred to as the "Reinstatement Period" which consists of the time the Notice of Default is mailed and recorded and the next 35 days. During this time the trustor has the right to reinstate the loan. During this time period, a junior lien holder has a right to cure the default.

Bankruptcy Filed: The bankruptcy automatically extends the reinstatement period another 60 days. Example: A notice of default is recorded on 11-15-07 which means the 35 day period would normally end on 12-20-07. However, a bankruptcy was filed on 12-01-07. By law there is a 60 day extension from the date of the filing of the petition. This means the 35 day period is extended to 1-29-08. The clock is still ticking all during this time.


Period 3:
The "Redemption Period" begins on the 36th day from the mailing and recording of the Notice of Default until the end of three months from the recordation of the default.

Bankruptcy Filed: Cannot proceed with the Notice of Trustee Sale until the automatic stay is removed by court order or operation on law.


Period 4:
This period is from the first day following the third month until the mailing, posting, and publication of the Notice of Trustee Sale.

Bankruptcy Filed: Cannot publish the Notice of Trustee Sale until the stay is lifted.


Period 5:
The 21 day period from the mailing, posting and publication of the Trustee Sale.

Bankruptcy Filed: May conduct the Trustee Sale as soon as bankruptcy is discharged.

In short, once a borrower is approximately 4 payments behind the Notice of Default is filed. Essentially there is a 120 day period before the sale date will be set from the day the default is filed.

In addition to the news of the mortgage freeze I am sure most people have read about, there is some pretty interesting insider stuff going on. I am a Loss Mitigation Consultant for a company called Titanium Solutions. Titanium is hired by companies like Indymac Bank, Countrywide Home Loans and Litton Loan Servicing (just to name a few of the hundred or so) to contact homeowners about their mortagage loans. Titanium then hires LMC's like myself (all licensed realtors) to get in touch with homeowners in trouble in their respective cities. I contact the homeowners by going to their homes and calling them to try to get their mortgage problems resolved.

The interesting part is not so much the process, but instead what these banks are offering. For example, Countrywide has offered the following scenarios to different homeowners I've worked with.

Scenario 1:
Current Interest Rate 11.69 (ARM recently adjusted). Arrears $9400. They offer the borrower a new rate of 7% fixed for 30 years, forgive the arrears and bring them contractually current on their credit report. The homeowner has to make an intitial payment (usually about 1/2 of their normal payment), then has a month grace period to catch up. All they have to do is send in their financial infomation and hardship letter for the bank to review.

Scenario 2:
Current interest rate 9% (ARM recently adjusted, borrower fell behind after that). Countrywide sends out letter stating that the borrowers interest rate has adjusted back down to their initial rate for the next five years. They must send in their financial information for bank to review and discuss repayment of the arrears.

These banks are going out of their way to avoid anymore foreclosures. Six months ago I could not even get a bank to take a small hit on a short sale. They were rejecting GOOD offers left and right. Today they are taking hits up to 30% off the balance owed. Some of the best deals around right now are short sales but it takes the right agent with the knowledge of the foreclosure arena to negotiate these deals with the buyers, sellers and the banks.

For questions, more info or if you are interested in some deals, give me a call today!





Click here to contact me for more information.

Katie James
Las Vegas, NV
NARREIA Advisor
http://www.NARREIA.com


National Association of Residential Real Estate Investment Advisors
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