Beware Home Owners - Judicial Foreclosures Coming to Las Vegas!

Nevada has always been a non-judicial foreclosure state. If a borrower was past due, all the mortgage holder had to do was produce copies of the appropriate documents and file foreclosure notices, and within approximately 5 months the foreclosure sale took place at the county steps. There was no right of redemption for the borrower, and the new purchaser took possession immediately.

But in the wake of the robo signing scandals, the Nevada legislature passed a new amendment, AB 284, which included the requirement that an authorized representative of the current lien holder had to complete and sign an affidavit indicating they had “personal knowledge” of all previous transfers of interest in the note. Most notes are sold by the originating lender within weeks of the initial closing, and often they are sold several times during the life of the loan.

Since there is absolutely no way any authorized representative of the current lien holder would ever be able to affirm personal knowledge that each previous lien transfer was done correctly, no lien holder would ever be willing to sign the new affidavit. Because of this, foreclosure filings have almost ground to a complete halt in Nevada, active inventory on the real estate market has shrunk to less than a two month’s supply, and properties priced at less than $200k are receiving multiple offers in droves.

Past due borrowers, many of whom have been sitting comfortably in their homes for up to two years while not making any payments, celebrated the new amendment. No more new foreclosure filings meant they might be able to stay another couple of years “rent free,” right?

Well, that celebration is about to come to a screaming halt. Banks, sitting on large inventories of non-income producing assets, have started to “wise up,” and they are pursuing the judicial foreclosure process instead. A judicial foreclosure does not require signing off on the AB 284 affidavit.

This has serious ramifications for past due homeowners. A judicial foreclosure entails an actual lawsuit filed against the borrower. The filings include the entire amount of the past due note, all past due interest, and the lien holder’s attorney fees. In addition, the borrower will have to hire their own attorney to represent them in court.

Best case scenario: the borrower files bankruptcy to wipe out the debt, keeping in mind that any assets they have accrued will be used to reimburse the bankruptcy creditors. And they will still have to pay attorney fees for the both the court case and the bankruptcy out of pocket. And with both a foreclosure and a bankruptcy on their credit, it will be a long number of years before they will be able to qualify for home ownership again.

A much better alternative for the homeowner AND the bank is a short sale. Benefits for the borrower: in almost 99% of short sales any loan deficiencies are “forgiven” and in a few years the borrower can re-establish their credit and purchase another home. (In some cases owner occupants can even receive a credit from the short sale proceeds for moving expenses.) Benefits for the banks: a judicial foreclosure means the borrower has a one year right of redemption. So the banks would have to rent out and maintain the property for at least a year before putting it up for sale to recoup some of their losses. A short sale is less costly and gets the asset off their books much more quickly.

So, Las Vegas homeowners, unless the sheriff is already at the door changing the locks, call us immediately to find out about listing your home as a short sale. The banks WANT to accommodate short sales now. They will still make you jump through paperwork hoops to get an approval, but their ultimate goal is to make it happen. As long as you have a little bit of patience for the process, you will soon be able to put this house behind you and start fresh again.

December is the "Black Friday" of Real Estate

For the past three years clients have been telling us they want a “steal of a deal” on Las Vegas real estate. So how come most of them stop looking in December? All month long, December is the Black Friday of real estate!

Savvy shoppers know that December is the best time of the year to buy property for a number of reasons. And that has never been more true of homes for sale in Las Vegas at the end of 2011 with interest rates and prices at an all time low already.

1. Motivated sellers! Many sellers will take their home off the market until after the holidays. This indicates a seller who is less motivated to sell. A seller who keeps their home on the market and easily available for showings wants to make that deal.

2. More negotiating room! Banks and other companies holding Las Vegas foreclosures want to clear their books so their year- end bottom line looks better to stockholders.

3. Less competition! There is less competition from other buyers who are distracted with holiday shopping and company parties. Or they may be waiting for more inventory to come on the market with the New Year. Yes, there will definitely be more listings after the first of the year, but again, these are likely sellers who are not as motivated to sell and may have until late spring or early summer to move.

4. Undivided attention! Real estate agents are less busy during December and have more time to hunt down that really special deal on your behalf. Listing agents are more willing to present lower offers to their sellers. Real estate agents may literally become your best friends during these slow months as they try to keep their sales moving.

5. Easier financing! Federal regulators have been threatening to tighten up mortgage guidelines yet again in 2012, and may also raise the amount of down payment required for FHA buyers. Not to mention that interest rates may also rise. A small percentage of increase in the interest rate means less buying power.

So this holiday season you have a choice: plan for the holidays, or take advantage of real estate’s annual Black Friday deals and plan for your future.

Lake Las Vegas Rises from the Ashes

Like the mythical Phoenix, Lake Las Vegas is rising from the ashes of the real estate melt down. Still the most unique and beautiful of any of the Las Vegas master planned communities, Lake Las Vegas stands like a Tuscan mirage in the middle of the desert, and once again new home builders are taking the plunge to put it back on the map as one of the most desirable projects in the country.

Set on 320 lush acres with its own private lake, three hotels, a casino, the Lake Las Vegas Marina and home to the prestigious South Shore Golf Club, Lake Las Vegas is an elegant European themed resort destination with 1400 luxury homes and condos surrounding the Montelago Village, a boutique collection of shops and restaurants. Each year over 20 events are featured in the community with wine walks, Shakespeare in the Park, beer fests, dragon boat festivals and more.

Like the rest of the city, Lake Las Vegas was hit hard by the real estate crash. Several of the surrounding golf courses closed, the Ritz Carlton shut its doors and even the casino went dark. But over the past few months, a renaissance has arrived along with international buyers looking for second homes. The “buzz” is back. The Ritz Carlton became the Ravella, the Montelago Casino opened, and The Golf Club at South Shore is offering incredible membership options to homeowners.

Harmony Homes and Woodside Homes are on the band wagon and offering some amazing incentives for Las Vegas home buyers. Harmony Homes has two lovely developments in Lake Las Vegas, and through the end of December is offering to pay two full years of homeowner’s association dues for all buyers that go into contract before December 31st in addition to some upgrade incentives. Homes sizes run from 2300 sf to over 4600 sf starting in the low $300s. Woodside Homes, starting in the low $200s, has standing inventory from 1779 sf to 2361 sf with golf course lot premiums included in the base price. In addition, Toll Brothers is closing out the last few units in their exclusive townhome development with lake and golf course frontage from 1600 sf to 2181 sf.

So if you’d like to be neighbors with Celine Dion, now is the time to take a look at fabulous Lake Las Vegas and take advantage of the great home prices and discounted golf and marina memberships. There are even some great foreclosures in Lake Las Vegas too. You only live once - and what a way to live!