About 1.1 million borrowers have enrolled in the program since it started a year ago, but so far only about 170,000 have completed the application process, the government said Friday.At that rate, just 16 percent, the program will have a minimal effect on the foreclosure crisis. And many analysts warn that the majority of borrowers never will complete the process — or fall behind again.
“Depending on what kind of ARM you have, your payments could adjust differently,” said Bill Uffelman, president and chief executive officer of the Nevada Bankers Association.“Rates are so low right now that a number of ARMs will adjust downward (resulting in lower payments). But you also have ARMs that will adjust upward no matter what. So, the real issue is we really don’t know what’s going to happen once all these ARMs start to reset.”
(AP) — The Nevada Supreme Court is considering adjusting rules for the state’s foreclosure mediation program.
Defaulting on a home that’s lost 50 percent of its value may seem like a smart move these days, but borrowers need to be aware of financial consequences.
As a recourse state, Nevada leaves the door open for lenders and collection agencies to pursue homeowners with deficiency judgments, going after assets and income years after a foreclosure or short sale, or bank-approved sale for less than the mortgage owed.
Homeowners who feel relieved to have the burden of debt lifted may be surprised to receive a letter from a collection agency two or three years down the road demanding payment on their old mortgage.