Nevada Works To Keep Borrowers In Homes

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Nevada has been hard hit by the spate of foreclosures nationwide. Gail Burks, president of the Nevada Fair Housing Center, discusses efforts to keep borrowers in their homes by renegotiating their mortgages.

MADELEINE BRAND, host:

Mortgage company executives met today with government officials in Washington. They tried to come up with new ways to reduce the rate of foreclosures. As Chris Arnold just told us, an awful lot of borrowers are still losing their homes despite the Obama administration's best efforts to stem that tide.

Nevada has been especially hard hit by foreclosures, so to better understand that, we called Gail Burks. She is president of the Nevada Fair Housing Center in Las Vegas. And Ms. Burks, the federal government has helped some 200,000 people stay out of foreclosure in the last few months, but far more borrowers are losing their homes still. Why isn't the government effort more effective? What do you see there on the ground?

Ms. GAIL BURKS (President, Nevada Fair Housing Center): Well, I think there's a couple of things and we discussed this at a meeting here in Las Vegas with U.S. Treasury officials, Fannie Mae officials and other entities regarding why some of the programs are not effective for Nevada. Initially, for example, those programs did not allow you to go over 105 percent of loan to value. Obviously, because Nevada was so hard hit, people were very upside down, and still continue to be. So, the refinance pieces, for those who may have a Fannie Mae or Freddie Mac loan, just didn't work for Nevada.

The second thing is lenders. Although over 50 lenders signed up to cooperate and are actually being compensated to modify loans and assist consumers, what actually happens when consumers contact them is a very different story. So, it's a combination of things that, when you put it all together, is not as easy as it sounds.

BRAND: Why is it then that the banks are not acting more aggressively to keep people in their homes, to stem the tide of foreclosures?

Ms. BURKS: The first thing is, I think many services don't realize that all real estate is local. So, many servicers, when you call their queue, your call could end up anyplace. It could be in the U.S., it could be out of the country. Second, in some instances, consumers aren't calling their servicer. Some are nervous, some think there's no help. They sometimes reach out to scam companies. And then third, there is no mandate that servicers work with consumers. Now in Nevada, we recently had AB-149 that passed, that requires any - mediation for any foreclosure filed after July 1st. We did that because of the problems that consumers were having in reaching servicers and getting cooperation.

BRAND: Is it in the banks' best interest, financial interest, to avoid foreclosure?

Ms. BURKS: There are times that it would be in their best interest. For example, some consumers attempt to sell their property and get approval for short sale. They have an offer, they have a buyer. However, they can't get a response from the lender. That's an example of working with the consumer. They could actually sell that property if they would give an answer as to whether or not that short sale is acceptable.

In some instances, consumers could afford the payment and are willing to pay, they just can't pay at the rate and the payment they currently have. Unless you are willing to sit down and analyze the group of consumers that you have in your portfolio, I don't think you can say it's not in my best interest, as a general statement.

BRAND: There are lots and lots of stories about people who would love to live in their house, would love to keep it in some way, but are so underwater with their mortgage that it just doesn't make financial sense to keep on paying and to stay in their house. Is that what you're seeing still in Las Vegas?

Ms. BURKS: We are seeing some consumers where but for - if they don't get a modification, they are so upside down that it would be in their financial best interest to perhaps go and be a renter. Not every homeowner will be able to save their home. What we all hope for, because it impacts all of us, is that one, if you can afford to pay and get it adjusted, you would make that attempt. Two, if you just can't afford to pay, then you would return that property in an appropriate way, so that there's a minimum amount of impact to the lender, to the economy, to your neighbors and to you.

BRAND: What does that mean: return it in an appropriate way?

Ms. BURKS: Voluntary repossession, a deed in lieu of foreclosure, making sure that you walk away appropriately.

BRAND: Gail Burks is president of the Nevada Fair Housing Center in Las Vegas. Las Vegas has one of the highest foreclosure rates in the nation. Ms. Burks, thank you very much.

Ms. BURKS: Thank you.

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