I am deeply concerned about the effects that widespread foreclosures have had on Nevadans and the national economy.  The housing crisis is at the core of the financial crisis and I remain committed to working on ways to stabilize the housing market and bring relief to families.  For answers to some of the most frequently asked questions about the foreclosures and the federal government’s response to the housing crisis please click here.

Hardest Hit Fund

In response to my calls for more aggressive foreclosure prevention programs, the Obama Administration created the Housing Finance Agencies Innovation Fund for the Hardest Hit Markets.  Nevada was awarded more than $150 million to develop programs that help unemployed and underemployed homeowners with financial assistance, mortgage principal reduction, speeding up short sales, and providing second mortgage relief.  The Nevada Affordable Housing Assistance Corporation (NAHAC) has been approved to oversee Nevada’s Hardest Hit Funds Program.  You can find more information about the program requirements and how to apply by clicking here.

Foreclosure Prevention Counseling for Nevadans

If you are at-risk of foreclosure and need help, communication is key.  Here are two numbers you can call for assistance.  And, as always, you can contact any of my offices for additional help.

Consumer Credit Counseling Service
1-702-364-0344

Consumer Credit Counseling Service is the nation’s oldest consumer credit counseling organization.  The agency helps consumers learn to manage their finances, balance their budgets and get out of debt.  Their services are confidential and counselors are available in person, over the telephone, or via the internet.

888-995-HOPE is available:

• To any homeowner in America having trouble paying their mortgage.
• Any time--24/7.

888-995-HOPE offers:

• Absolutely free foreclosure prevention counseling by expert counselors at HUD-approved agencies.

When a constituent calls 888-995-HOPE:

• Service begins immediately—the counselors themselves answer the phone.
• Homeowners can get budgeting help, a written financial plan, and assistance contacting their lender.
• If they'd like face-to-face counseling, they are referred to their local NeighborWorks® agency or other counseling agencies.
• If they need additional services, they are referred to agencies in their area.

If you need more information:

• About 888-995-HOPE: info@995HOPE.org (For more information click here)
• About in-person counseling: foreclosuresolutions@nw.org (For more information click here)
• HUD Approved Housing Counseling Agencies (link)

Considering a Forensic Mortgage Audit?

Stop Foreclosure Fraud.  To visit the Nevada Foreclosure Taskforce, click here.

Please be advised that the Nevada Division of Mortgage Lending is urging borrowers to be extremely wary when considering contracting with forensic mortgage audit companies.  A forensic mortgage audit is a review of the borrower’s mortgage loan documents to determine whether or not the lender complied with state and federal mortgage-lending laws, such as the Federal Truth in Lending Act. 

The Division cautions that many of these services, which are marketed as tools that borrowers can use to get better loan terms or to influence loan modifications, are in fact scams.  Furthermore, even if the audit is performed by a trained forensic auditor, a mortgage professional or attorney, there is no indication that paying for this service will help borrowers obtain a better or faster loan modification.  The decision to modify a loan ultimately rests with the lender or mortgage loan servicer.

If you do choose to pay for loan modification services, please check the Nevada Division of Mortgage Lending’s list of licensed and bonded companies.  If you think you are a victim of a forensic mortgage audit scam, you can file a complaint with the Nevada Division of Mortgage Lending.  If your complaint concerns an attorney offering this service, you can file a complaint with the State Bar of Nevada.

Making Home Affordable

The Obama Administration established the Making Home Affordable program to help provide viable refinancing options for responsible homeowners, loan modifications for distressed homeowners, and incentives to ensure that lenders work to stabilize the housing market one home at a time.

Mortgage Refinancing:

Millions of responsible homeowners are unable to take advantage of historically low mortgage rates because they have lost value in their homes as a result of the downturn in the housing market.  The Making Home Affordable program will help those homeowners that took out conforming loans owned or guaranteed by Fannie Mae and Freddie Mac to refinance into more affordable rates.

Loan Modifications:

Millions more struggle to stay current on their mortgage payments in the face of depleted household income.  The Administration has proposed a comprehensive strategy to establish loan modifications that create a shared effort between the government and the lender to reduce the borrower’s monthly mortgage payment to as low as 31 percent and no more than 38 percent of income.  This program requires institutions that receive government assistance to follow clear guidelines for preventable foreclosures and will help at-risk homeowners by implementing the following measures:

• Providing “Pay for Success” incentives for servicers to perform loan modifications, including an up-front fee of $1,000 for each eligible modification and additional fees – awarded monthly as long as the borrower stays current on the loan – of up to $1,000 each year for three years;
• Providing incentives for borrowers to receive a monthly balance reduction payment as long as they stay current on the loan, up to $1,000 per year for five years; and
• Encouraging servicers to reach borrowers early with incentive payments of $500 to servicers and $1,500 to mortgage holders if they modify loans before at-risk borrowers fall behind in payments.

Additionally, the Administration recently improved the Hope for Homeowners (H4H) program, another mortgage-modification program that especially helps homeowners facing negative equity in their mortgage, a problem that unfortunately too many Nevadans face.  This program allows homeowners to be placed in a fixed-rate, federally guaranteed mortgage in return for the mortgage holder agreeing to reduce the principal owed on the mortgage to a level below the current value of the home. 

Short Sales:

Most recently, the Administration expanded the Making Home Affordable program to help incentivize short sales.  For many Nevadan homeowners trapped in a mortgage with negative-equity, a short sale is often a practical and economical solution.  This new initiative will encourage lenders to pursue this avenue by:

• Offering mortgage servicers up to $1,000 and borrowers up to $1,500 to successfully complete a short sale transaction; and
• Provide up to $1,000 to offset the costs associated with enticing second mortgage holders to relinquish liens that would prevent a short sale.

The Making Home Affordable program will also strengthen confidence in Fannie Mae and Freddie Mac by increasing the Treasury Departments funding commitment to these institutions.  This will help stabilize the housing market and keep mortgage rates low.  The Administration will also work with Fannie and Freddie to support state housing finance agencies serving homebuyers.  This initiative will help millions of families maintain the American Dream of homeownership.

For information and resources about programs to help make your mortgage affordable, please go to http://makinghomeaffordable.gov/.

Helping Families Save Their Homes Act

The Helping Families Save Their Homes Act, which has been signed into law, includes several provisions to prevent foreclosures, protect tenants and combat mortgage scams.  This law:

• Protects loan servicers from lawsuits, many of whom won’t modify mortgages fearing they will be sued by investors.
• Expands the H4H program by lowering fees for homeowners and lenders alike, and giving lenders greater incentives to participate.  This program helps modify loans with the goal of lowering monthly mortgage payments.
• Provides resources to HUD to combat mortgage fraud, including additional staff and advertising to warn consumers about scams and inform them of legitimate foreclosure-relief services.
• Provides up to $5 million a year for two years, and directs HUD to advertise in languages that will raise awareness more broadly in communities across the nation. This will help prevent fraud and provide homeowners with information on how and where to get government-approved assistance.
• Includes new protections for tenants of foreclosed homes.

Fraud Enforcement and Recovery Act

Mortgage fraud is one of the biggest factors of the current economic crisis.  Unfortunately, as the government increased efforts to help families losing their homes, the prevalence of fraud rose simultaneously.  There are many companies claiming to be government-approved and charging for services that should be free.  Further, these companies are also continuing to offer consumers extremely risky loans or tricking them out of their homes.  In 2001, 6,400 cases of fraud were reported across the country. In 2008, the number of fraud cases almost quadrupled to 63,173 cases (FBI and Democratic Policy Committee).  To resolve this problem, I help lead the Senate to pass the Fraud Enforcement and Recovery Act of 2009 which has been signed into law.  This law:

• Provides critical funding and new tools that will allow law enforcement agencies, such as the FBI and HUD, to prosecute and punish those responsible for the mortgage fraud and corporate schemes that have hurt countless hardworking Americans and led to the worst financial crisis in decades.
• Increases the amount of resources at the U.S. Department of Justice to take fraud cases to trial.
• Applies government regulations to all companies that sell mortgages.  Previously, the federal government could only regulate banks.
• Closes several legal loopholes that otherwise may allow individuals guilty of criminal conduct to evade prosecution.  Individuals who have engaged in corruption or deliberate criminal behavior should not be able to escape punishment on a technicality.
• Provides the Federal Trade Commission (FTC) funding to investigate subprime loans. The latest FTC investigations have resulted in charges against a California company allegedly charging Hispanic and African American clients higher interest rates than White clients, even though they had the same qualifications [FTC].

If you think you are a victim of mortgage fraud please contact the Nevada Attorney General’s Bureau of Consumer Protection at in Las Vegas 702. 486.3194or 775.684.1180 in Carson City.  A complaint form, as well as other valuable information on consumer protection is also available on the Attorney General’s web site at www.ag.state.nv.us.