Hurting homeowners line up for help at Cashman Center
Asked what he expected to get at Friday’s homeowner event at Cashman Center, Las Vegas real estate investor Rick Korbel answered, "Honestly, nothing."
Then why was he standing in line with hundreds of other Bank of America customers at risk of losing their home to foreclosure?
"Curiosity," Korbel said. "I’m thinking they’re going to say, ‘You’re still employed, you’re still making money. There’s people in worse cases.’ My concern is if it gets worse, then what?"
Korbel said he’s upside down by about $300,000 on a home he bought in 2007, though he’s still making payments of almost $2,000 a month on an interest-only, adjustable-rate mortgage at 3.25 percent. When the terms of the loan expire or the prime rate goes up, it’s going be an issue, he said.
About 1,000 people attended the first day of the "Home Means Nevada" event presented by the Nevada Department of Business and Industry and Hope Now alliance. The first person showed up about 4 a.m., and by the time the doors opened at 9 a.m., there were a couple hundred people in line, said Elizabeth Daniels, public information officer for the state department. An estimated 2,000 people are expected as the event continues today at Cashman Center, 850 Las Vegas Blvd. North.
More than 250 bank representatives, credit counselors, pro bono attorneys and housing assistance specialists will be on site to provide information about programs available to help homeowners.
Gov. Brian Sandoval said he personally called major lenders such as Bank of America, Wells Fargo and Chase to make sure they sent representatives who could make on-the-spot decisions about loan modifications.
"There are a lot of people underwater and there are a lot of scammers out there. We wanted people to come to a place that’s legitimate and they know they’ll get answers," Sandoval said Friday during a short visit at Cashman Center.
Sandoval said the homeowner event is a huge "first step" toward learning how to work with the banks. He said he talked to one man who told of getting a loan modification on the spot.
Bank of America helped about 60 percent of customers with home-retention options at a similar event in Las Vegas a year ago, said the bank’s Sheila Sellers, a mortgage outreach executive from Charlotte, N.C.
"The key is people have to show up with all the documents. That’s pivotal," Sellers said. "Sometimes they don’t bring their tax returns or financial information, or they only bring part of it."
Customers who didn’t have all of the proper documents can return to the workshop today or go to one of Bank of America’s customer assistance centers in Las Vegas, Sellers said.
The bank said Friday that it is providing mortgage relief to about 200,000 underwater homeowners nationwide, though bank officials did not respond to requests for details.
Bank of America will reduce the amount owed by the homeowners by as much as $100,000, in some cases. The move will help reduce the amount of penalties it owes to the U.S. Department of Housing and Urban Development by $850 million.
The penalties were part of a broader $25 billion settlement with state and federal prosecutors announced Feb. 9.
As the foreclosure crisis evolved in Nevada, principal reduction became a rallying cry for many homeowners. About 60 percent of mortgages are underwater, which equates to roughly $12 billion of negative equity.
The recent settlement with the nation’s five largest lenders over foreclosure fraud requires that servicers work off up to $17 billion in principal reduction and other forms of loan modifications nationwide.
Bank of America has done a few principal reductions in Nevada through the Neighborhood Stabilization Program’s hardest-hit funds, though Sellers said she didn’t know how many.
"This is all about foreclosure avoidance," she said. "That’s the most critical outcome, and that includes loan modifications and consideration for principal reductions. Every situation has to play out in the documentation and is based on the customer’s situation. With some of the customers, we have to talk about transition."
Korbel, the homeowner who’s about $300,000 underwater , said he’d continue to make his mortgage payment if the bank would give him zero percent interest to pay down the principal only and keep his payments where they are now, even though it’s going to take him 30 years to break even.
As he said that, he took a seat and waited for his number to be called.
He was No. 98.
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
