FAQ's and Warning Signs

10 WARNING SIGNS TO LOOKOUT FOR WHEN RETAINING
A 3rd PARTY NEGOTIATOR TO WORK ON YOUR HOME LOAN(S):

(1) Guarantees that they can help you before they fully understand your situation;
(2) Promises to get rid of your principal balance owed;
(3) Promises and guarantees to get you into unrealistic loan terms (like a 40 yr fixed at 3% interest);
(4) Anyone that encourages you or asks you to make your mortgage payment directly to them
(5) Anyone or company that charges you all fees up front and/or no money back guarantee for their services;
(6) People who claim to be "ex loan officers" that are now "mortgage consultants";
(7) Realtors who claim to be "experts" in loan modifications but then offer a short sale upon denial;
(8) Non attorneys offering legal advice;
(9) People who claim to be able to get rid of your mortgage entirely; and
(10) Individuals or companies (non attorneys) who claim they will sue your lender for "loan document violations" and asks you to pay them to initiate lawsuits against their lender/banks.

The number one rule to remember when hiring a third party negotiator...if it sounds too good to be true, it probably is!

FREQUENTLY ASKED QUESTIONS

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1) Do I have to be delinquent to receive relief from my lender?: a. No. You do not have to be delinquent. There are programs that some lenders offer that allow homeowners that are maintaining their payments to receive for financial relief.
2) What is a loan modification?: a. There should be a universally accepted definition. To date, there is not. Some lenders will do a "hide the ball" trick and call a "repayment plan" or "forbearance" a loan modification which is usually used to trick the homeowner into thinking it's their only available option. A TRUE loan modification should be a PERMENANT change to your existing terms, principal or interest rate. Band-aids are temporary fixes and they will not help someone with a permanent hardship. Be leery of any company or lender that encourages you to accept any type of "temporary fix". You need permanent solutions to permanent problems.
3) What is a forbearance agreement?: a. An agreement wherein the lender allows the borrower to go a specific time period (stated in the agreement) to not make their mortgage payment. These are usually for people with temporary hardships. (ex. You just lost your job and have already found a new one and there is a time period where you won't be getting paid; or pregnancy; divorce; etc...)
4) What if I have already received a loan modification and am unable to maintain the payments?: a. Usually the rule of thumb with most lenders is that once you have executed an agreement, you must maintain payments for up to one year before being considered for a new loan modification. There are exceptions to this rule. Each loan is different.
5) Can you stop a Trustee Sale?: a. Yes and no. If given ample time, Trustee Sales can be stopped without filing a Bankruptcy simply by stating your intentions to keep your property with your lender and gaining an "in review" status.
6) What does "debt to income" ratio mean?: a. To determine your maximum mortgage amount, lenders use guidelines called debt-to-income ratios http://www.realestateabc.com/loanguide/afford.htm.

This is simply the percentage of your monthly gross income (before taxes) that is used to pay your monthly debts. Because there are two calculations, there is a "front" ratio and a "back" ratio and they are generally written in the following format: 33/38. The front ratio is the percentage of your monthly gross income (before taxes) that is used to pay your housing costs, including principal, interest, taxes, insurance, mortgage insurance http://www.realestateabc.com/loanguide/afford.htm (when applicable) and homeowners association fees (when applicable).

The back ratio is the same thing, only it also includes your monthly consumer debt. Consumer debt http://www.realestateabc.com/loanguide/afford.htm can be car payments, credit card debt, installment loans, and similar related expenses. Auto or life insurance is not considered a debt. A common guideline for debt-to-income ratios is 33/38. A borrower's housing costs consume thirty-three percent of their monthly income. Add their monthly consumer debt to the housing costs, and it should take no more than thirty-eight percent of their monthly income to meet those obligations.
7) Will bankruptcy stop my Trustee Sale?: a. You will need to contact a licensed bankruptcy attorney to answer this question. Be sure and speak to an experienced practitioner.
8) Can you help me with my investment property or is relief only available on your primary residence?: a. Absolutely. It's one of the biggest myths that lenders will only help borrowers with their primary residences. Most lenders have programs for borrowers with investment properties as well.
9) Will AB149 help me?: a. If you have received a Notice of Default/Breach, Election to Sell for your primary residence AFTER July 1, 2009 and you live in the state of Nevada, you are entitled to request mediation with your lender. Our office works directly with experienced attorneys who are representing people at mediation. If you are interested, please call us directly for more details.

STATE OF NEVADA

Non-Judicial Foreclosure

The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

Power of Sale Foreclosure Guidelines

If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:

The power of sale must not be exercised until the grantor, or his successor in interest, has for a period of 35 days, failed to make good the deficiency in performance or payment.

The beneficiary or the trustee first executes and causes to be recorded in the office of the recorder of the county wherein the trust property is situated a Notice of the Breach and of his Election to Sell or cause to be sold the property to satisfy the obligation; and Not less than 3 months have elapsed after the recording of the notice.

The 35-day period commences on the first day following the day upon which the Notice of Default and Election to Sell is recorded in the office of the county recorder of the county in which the property is located and a copy of the notice of default and election to sell is mailed by registered or certified mail, return receipt requested and with postage prepaid to the grantor, and to the person who holds the title of record on the date the notice of default and election to sell is recorded, at their respective addresses, if known, otherwise to the address of the trust property.

The Notice of Default and Election to Sell must describe the deficiency in performance or payment and may contain a notice of intent to declare the entire unpaid balance due if acceleration is permitted by the obligation secured by the deed of trust, but acceleration must not occur if the deficiency in performance or payment is made good and any costs, fees and expenses incident to the preparation or recordation of the notice and incident to the making good of the deficiency in performance or payment are paid within the 35-day period.

The trustee, or other person authorized to make the sale under the terms of the trust deed or transfer in trust, shall, after expiration of the 3-month period following the recording of the notice of breach and election to sell, and before the making of the sale, give notice of the time and place thereof in the manner and for a time not less than that required by law for the sale or sales of real property upon execution. The sale itself may be made at the office of the trustee, if the notice so provides, whether the property so conveyed in trust is located within the same county as the office of the trustee or not.

Every sale made under the provisions of this section and other sections of this chapter vests in the purchaser the title of the grantor and his successors in interest without equity or right of redemption. The sale of a lease of a dwelling unit of a cooperative housing corporation vests in the purchaser title to the shares in the corporation, which accompany the lease.

This information is not intended to be used as "legal advice". It is simply based upon our experience with lenders and borrowers.

Although the Consumer Advocacy Group works with a variety of experienced attorneys in the Phoenix, Los Angeles, San Diego, Orange County and Las Vegas areas, we are not attorneys and do not offer any legal advice to our clients. If you need to speak with an attorney, please call our office and we will refer you to one in your area!