It’s been just about four months since the new administration unveiled its foreclosure prevention plan. Homeowners here in Las Vegas and around the US have contacted their mortgage service providers looking for assistance. Most of our local institutions started accepting applications in April and have indicated in many cases they are overwhelmed by the response. Clearly, if this program succeeds it will be beneficial to home owners and have a positive impact on Las Vegas real estate.
Las Vegas Real Estate & Federal Government’s Rescue Plan
Under the administration’s plan, people with little or no equity in their home can refinance to take advantage of today’s lower rates, although these are changing rapidly. The rescue plan waives the requirement that homeowners have at least a minimum of 20% equity in their home – enabling them to participate in the plan even if they have loans of up to 105% of the total value of their property, as long as they meet other criteria.
Eligible borrowers who are in or at risk of default may be able to lower their monthly payments to no more than 31% of their pre-tax income, which is beneficial to most. This obviously helps Las Vegas homeowners who have seen a significant drop in income. It should be noted that Homeowners, service providers and mortgage investors can receive incentives to motivate them to participate in this program.
Impact on Las Vegas Real Estate
What will the ultimate impact be on Las Vegas Real Estate? It’s hard to say at this point, as we are still early in the process and to date the response has been overwhelming for many banking and lending institutions. But, we believe this can help to alleviate some of the pressure on families here in Las Vegas who are struggling to make their mortgage payments, which will in turn only help the Las Vegas Real Estate Market.
