Several months ago I mentioned Nevada was finally joining the 21st century in regards to foreclosure mediation. The first two sessions – Nevada doesn’t jump into these things – will happen on Sept 14th with two properties in Las Vegas as the “test” properties.
I know other states have already set up their mediation programs and have been up and running with what some say is a great success rate, i.e. the homeowners got to stay in their homes. In fact, Marquette University Law School on their website makes this comment: “…jurisdictions that have used mediation in foreclosure cases report a high success rate, and more and more jurisdictions are turning to mediation as a solution for this crisis.”
Because Nevada is the turtle in this race only 97 mediators have completed training and were appointed last week (Aug 17-21). The State expects to phase in more mediators over the next few months. They better if they are to be in compliance with state law and put out a program designed to help distressed property owners.
Mediations Per Month
I didn’t do any research to determine how many mediations Ohio or New Jersey, or any other state for that matter, are doing per month but Nevada expects to do more than 1,000 mediations per month once the program is operating at full capacity. This seems like a reasonable figure given to date the program manager has received more than 650 requests. Plus, with Nevada’s high foreclosure rate, mediation only makes sense for anyone wanting at least a chance to stay in their home.
If my state is an indicator, mediation may be all it was cracked up to be when it was being proposed as a viable solution.
Investors Still Out In The Cold
By the way, investors are still excluded from the mediation process. My best guess is that will change as the program proves its mettle. And, to me, investors should be included as well. In far too many instances, it is investors who step in to save the day.
In my area, it is the investors who have raised the sales figures quite handsomely. A real estate agent friend mentioned this morning his sales are investor only at this point in time. Not by choice, by default. Wes is quite active and doesn’t miss an opportunity to show a property. He walks around with his eyes wide open.
According to Wes, Mom and Pop are still conspicuously absent from the buyer side of the equation. His best guess is it will be that way through the end of the year given the layoffs that are happening in our county. He says that the investors are willing to buy because they are getting properties at severe discounts and renting them at below market rates.
Mind you the rental rates my be low but they are high enough to give the investor a return of investment in a very short time. One quick example comes to mind. A person bought a home for $60,000 and is receiving $800 a month in rent. At $9600 per year, the Return happens in a little over 6 years.
Factor in the tax benefits and this becomes an immediately (in most cases) profitable venture. If by some chance real estate does a magic turn around, this person’s return on investment could shoot to the moon.
Realize I’m speaking only about this neck of the woods and what one real estate practitioner is seeing as he trudges through his day. It may be different in your area. Real estate could be a booming business.
By the way, the investors are buying foreclosed properties. That wasn’t too difficult to discern but I thought I’d mention it anyway.
I guess if mediation turns into a raging success, we could see that spike upwards in real estate prices. At least that is my 2¢.