Bank fails to foreclose on home

I recently received a question from Rick, from Hurricane, Utah, who said he had a problem with his mortgage servicer and eventually was forced into bankruptcy about five years ago.

Rick and his wife continued to pay their homeowners association dues, garbage and other fees on the property in order to maintain the residence, even though they were no longer living in the home. Now, with the bankruptcy discharged and resolved, the bank still hasn't foreclosed on the home so that Rick and his wife can move on with their lives.

As Rick said, "I don't know why they won't foreclose on me now. I need to get this out of my name. This has been a real nightmare for me and my wife."

Unfortunately, Rick and his wife find themselves in a situation that is all too common in Nevada at this time. In my opinion, bad legal advice from attorneys who don't understand the motivations of financial institutions when it comes to foreclosures have put homeowners in peril. In addition, the ever-changing laws that impact homeowners and make it easier to complete a short sale have made bankruptcy the last resort for many Nevada homeowners.

The first thing anyone in this situation needs to do is reach out to a Realtor who is an expert in dealing with distressed properties and homeowners. Many who work in the distressed market also work with attorneys who truly understand the impact bankruptcies and short sales have on homeowners.

Without knowing the specific details in Rick's situation, I also suggested to him that a short sale could still be performed on the home that remains in his name and continues to be a financial and emotional drain on his family.

A competent and skilled Realtor working with an equally skilled legal team, can successfully negotiate a short sale that immediately removes the home from the homeowner's name and releases them from their obligations involving this property.

Keep in mind that property taxes, garbage and sewer fees, HOA assessments and any ongoing fines imposed by the HOA remain in the name of the homeowner until the property has been legally transferred to a new owner.

This speaks directly to the ongoing stresses we have here in Southern Nevada with regard to vacant homes. I've seen reports estimating that there are more than 42,000 vacant and abandoned homes in Southern Nevada. These vacant homes are creating significant health and safety issues, as well as obvious effects of neglect, that detract from the quality of life in our neighborhoods.

Financial institutions need to start being more responsible and should foreclose on these vacant and abandoned homes, no matter why the homeowners abandoned these properties.

Realtors strongly supported legislation during the 2013 Nevada Legislature that expedited and eased the process financial institutions go through to foreclose on abandoned homes. Thus far, they've refused to do so. These financial institutions must take action before something tragic happens in one or more of these abandoned homes.

As always, I welcome your questions. Email them to ask@glvar.org and I'll do my best to answer them.

Keith Lynam is the 2015 president of the Greater Las Vegas Association of Realtors and has been a local REALTOR® for 11 years. GLVAR has more than 12,000 members. E-mail questions to ask@glvar.org. For more information, visit www.lasvegasrealtor.com.