PRESIDENT OBAMA...

??DEAL OR NO DEAL??

Obama's Making Home Affordable

and

Nevada Foreclosure Mediation Program

Last time we learned how to modify our loan by ourselves…. but…. what if the bank does not want to cooperate and the home goes into the foreclosure process?

Well…….. HERE COMES JOHNNY!!!!!! Our President Mr. Obama and Nevada Governor Mr. Gibbons!

Obama’s Home Affordable Modification Program (H.A.M.P.) and the Nevada Assembly Bill 149, (AB149) passed and signed into law by Governor Gibbons to take effect July 1, 2009 and amended 435, gives borrowers the right to seek mediation of a mortgage loan if they are the owners and occupants of that home.

The new law states that the trustee cannot exercise a power of sale on an owner-occupied residential property unless the trustee includes with the notice of default and election to sell (NOD) this information:

1. Contact information that the homeowner may use to reach a person with authority to negotiate a loan modification on behalf of the beneficiary of the deed of trust;

2. Contact information for at least one local housing counseling agency approved by the United States Department of Housing and Urban Development (HUD); and

3. A form upon which the homeowner may indicate his election to enter into mediation or to waive mediation and one envelope addressed to the trustee and one envelope addressed to the Mediation Administrator, which the home-owner may use to comply with the provisions of subsection.

The trustee must also serve a copy of the NOD and contact information upon the Mediation Administrator and record at the office of the recorder of the county in which the trust property or some part of it is situated, the NOD, contact information, and a certificate from the Mediation Administrator which says no mediation is required or that mediation has been completed.

The new law requires that the homeowner complete the mediation form no later than 30 days after service of the NOD upon him and return it by certified mail to the trustee.

If the home-owner indicates on the form his election to enter into mediation, the trustee shall notify the beneficiary of the deed of trust by certified mail of the election of the

home-owner to enter into mediation and file the form with the Mediation Administrator, who shall assign the matter to a mediator and schedule the matter for mediation. No further action may be taken to exercise the power of sale until the completion of the mediation.The cost of the mediation is $400, shared equally by the homeowner and the lender.Each party must pay their $200 portion prior to the mediation.

A lawyer is not required to be present with you in the mediation process, but each side is welcome to have an attorney represent them.

There is also another bonus with the new law. The homeowner has until 5 days before the trustee’s foreclosure sale to make up back payments and reinstate the loan. This extends the time to make good the deficiency in performance or payment on the mortgage by 3 to 5 months. The old law only gave the homeowner 35 days after the NOD to reinstate the loan.

Another very important bill, which assists the homeowner in foreclosure, is AB 471.Why?

If a lender reduce the principal balance of a loan (VERY RARELY) or the property is foreclosed upon or sold in a short sale process, the amount of the canceled debt must be included as income in your tax return, in addition the lender can seek for a DEFICIENCY ORDER for the insufficient or forgiven amount.

The AB 471 provides for relief from any deficiency judgment against owner-occupied homeowner if the foreclosing entity is bank, which loaned the money for the purchase of the property, and the homeowner lives in the property financed from the time of financing until the present.

AB 471 only applies to foreclosures proceedings on loans after October 1, 2009.

I will talk in detail about  deficiency judgment and tax liabilities in my next article....

"BORROWER TAX LIABILITIES REGARDING LOAN MODIFICATIONS, FORECLOSURES AND SHORT SALES."