Kristine Dugan, ABR, BS, CRS, SFR
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How New Law AB284 Helps Nevada Homeowners
Posted on November 24, 2011
On October 1st, a new law went into effect in Nevada that will help homeowners that are trying to short sell their home - the law is Assembly Bill 284. This law requires Banks to have gathered all foreclosure information up front before they start the foreclosure process which includes who "owns" the loan (also known as the trustee), the amount of money due to bring the loan current, and who is actually foreclosing on the property (there are many additional items noted in this bill however these are the issues most relevant to homeowners short selling their property - to read more about AB284 click here). Most people probably think, don't the banks need all that information first before they start a foreclosure on a property? These items were not required previously which forced me to become a detective with the banks. The toughest thing to find out during a short sale is who is the trustee or entity that "owns" the loan because that is the entity that is ultimately approving the short sale. Most people believe that if they make their mortgage payment to Bank of America, Chase or Wells Fargo - that bank owns the loan. Not necessarily the case.
To give you an example, I make my mortgage payment to Bank of America every month, just because I pay BofA does not mean BofA owns the right to the loan. BofA is just the servicer and Fannie Mae owns my loan. So Fannie Mae is the trustee. It is kind of like a when you are renting and paying the property manager your rent, the property manager (or servicer) does not keep the rent. They collect the rent on behalf of the landlord (or trustee) then reimburse the landlord their profits each month. Same concept here.
So why does it matter to know who the trustee is - well each trustee has certain guidelines or requirements to short sale a property. Knowing this information upfront will help provide the homeowner with all of their options when avoiding foreclosure. For example, some trustees do not seek a deficiency (or go after the homeowner for amount still owed on the loan after a property has been successfully sold through a short sale). Knowing this information upfront can provide the homeowner with additional peace of mind to sell their property and avoid foreclosure.
If you are behind on your mortgage payments and are curious about your options to avoid foreclosure, please contact me today so we can review all of your options.
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