Tuesday, September 7, 2010

The Legal Pitfalls of Financial Stress

Part 1: If it sounds too good to be true…
Many families are experiencing financial strain in Las Vegas. With so many companies cutting salaries and laying off personnel, almost every family has endured a reduction in income over the past two years. For some, the loss of income has been so devastating that they can no longer make ends meet. Some have stopped making payments on their homes, others have stopped making payments on credit cards and other bills, and some have done nothing but know that they are running out of options.

As a result, unscrupulous individuals seek to exploit people in such desperate circumstances, so it is important that you carefully select anyone to help you with loan modification, foreclosure, bankruptcy or debt settlement. As the saying goes, if it sounds too good to be true, it probably is. The first wave of exploitation came with “Loan Modifications” in late 2007. Former loan officers, bankers, brokers and realtors started loan modification companies, promising to save your home in exchange for $3,000 or $4,000. Many home owners relied on their promises to save their home, only to find themselves foreclosed upon, evicted and out thousands of dollars that they could have used to start building again. For two years, the loan modification companies ran unchecked and unregulated.

In 2009, the Nevada legislature instituted strict guidelines to get the loan modification companies under control. The vast majority of companies were shut down, and while some home owners received modifications, most did not. During the same legislative session, the legislature created the Foreclosure Mediation Program to fight the foreclosure epidemic and give homeowners an opportunity to meet with their lender and negotiate resolution with specific rules and guidelines to structure the process. The Foreclosure Mediation Program has allowed many homeowners to negotiate a modification and stay in their home. However, there are still unscrupulous ploys to dupe home owners out of a significant amount of money to “represent” them during mediation.

It is important to note that only an attorney can give you legal advice, and in the event that the lender does not follow the rules during the mediation, only an attorney can file a petition for judicial review on your behalf and represent you in court. If you have received a notice of default, you only have 30 days to elect mediation so do not delay.

6 comments:

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