Thanks for joining us. Im bob massi. Civil war commander George Custer is said to have uttered the famous words, its not how many times you get knocked down that counts. Its how many times you get back up. Nowhere is that spirit more evident than in las vegas, and we found one spot where it looked like they might not get back up, but they did. So, here i am in Reflection Bay in henderson, nevada, a place that went from riches to rags and now back to riches, one of the greatest stories of redevelopment and resurgence in america. This entire area five years ago was ground zero of the realestate crisis in america, and today it is an american success story. Lake las vegas is a beautiful, 328acre lake that was actually manmade. It was a massive project spanning decades, creating the lake, the golf courses, hotels, and luxury communities in the middle of the vegas desert. But when the recession hit, the area was devastated. This was the kind of situation thats very rare to have a 300acre lake and have all these residential areas around it, with the hotels and golf, but when the economy changed, people walked away, not just in las vegas, but at Lake Las Vegas. The golf course dried up, and Property Values they just plummeted. You went from 500 a square foot to 120 a square foot for homes. Its hard to even realize how bad this looked five, six years ago. In 2008, the golf course was closing. There were weeds higher than our heads, and what started happening is people lost confidence. They lost confidence both in their mortgage and the development itself. Hotels closed, homes were abandoned, and Reflection Bay they were forced to shut down. Eventually, the course was purchased by paulson co. , along with 1,000 acres of Lake Las Vegas land. Give us an idea, visually, what it was like before you guys took over. It was tough. You know, just in the bunkers right behind us, there were mesquite trees that were 15 feet tall. Wow. The sand had become hardpacked dirt. The greens were gone. The vision was to bring Lake Las Vegas to the glory that it had as a luxury destination but not just that do it as a primary place. Were proud that were in henderson. Absolutely. You know, as a town, schools, parks, families, shopping its all here. The first thing we did was really fix the infrastructure that was here. We built the road galleria parkway. The second thing we did was we embraced this beach. We made our beach four times bigger here at Reflection Bay, and they say, wow its even better than before and thats kind of what i think las vegas is were better than before. We brought in 28,000 tons of sand, and its intended to be a lifestyle, not just for the weddings, and thats a nice site for that, but for the paddleboarding, the kayaking, and then the duffy boats so that when youre here, one of your family members might golf, but the rest of the folks can do something all day, and on a day like today, itd be perfect to go out and paddleboard. So, water in the desert is not something that you would expect. Right. So we embraced it in a way that says, get people on the water. And i think in the past, the resort and the course focused on very highend and not allowing people to use the lake. We think you should. Jack nicklaus came back and worked with us, and you can see the love he had for the course. Sure. Of course. So, we completely rebuilt the greens, rebuilt all the bunkers, and then we also just made it a more playable course. And now when you look at it, its just so dramatically changed. Its in great condition. Im assuming, at least for those golfers out there watching this, this is pretty affordable. This is affordable. I mean, its a top5 public course. Its the only signature course thats public for Jack Nicklaus here in nevada. The process was to work with the city and the people that live here to remind them what a beautiful place it was, fix what was here, but mostly just say, hey, were part of your community. People really have a special feeling about Lake Las Vegas, so they always kind of thought we were gonna come back. They just didnt know when. The rebound has been dramatic. Realestate prices stabilized. The onceclosed hotels reopened. And, most importantly, the people who once fled the area well, theyve returned. Once youre here, you feel it. For example, when we greened up the grass, the Community Called the falls, at that front entrance, over the last year, saw their home prices go up 31 . Its a show me, dont tell me kind of a strategy. Weve been very lowkey, but once, now its time to show off, we are, and i think when you see it, you really like it. After a quick break, well meet a couple who thought they moved on with their lives only to be asked by the bank to move back into the house they had given up. [ woman vocalizing ] when you think about success, what does it look like . Is it becoming a better professor by being a more adventurous student . Is it one day giving your daughter the opportunity she deserves . Is it finally witnessing all the artistic wonders of the Natural World . Whatever your definition of success is, helping you pursue it, is ours. Tiaa. My school could be bad. Ing fast. Could be a blast. Cant find a single thing to wear. Will they be looking at my hair . Wont be the same without you bro. When its go, the new Choice Privileges gets you there faster. And now, stay two times and you can earn a free night. Book now at choicehotels. Com welcome back. Im bob massi, the property man. I was contacted by a couple who moved out of their home after losing it to foreclosure, only to be asked by the bank to move back in two years later. Lets go meet them right now. So, now were gonna go meet dan and dottie. Now, they live close to Lake Las Vegas, and they basically have been fighting with the lender for over four years. And now they have a scheduled meditation to try to resolve this dispute. Were gonna give them some direction as to what they need to do to try to save their home, but, remember, its been a 4year battle, and im not sure what the final resolution is going to be. Dottie, its a pleasure. Thank you for having us. My pleasure. My pleasure. Dan and dottie moved into an area that they thought was gonna be their retirement home. Dan is a realtor, and for a while, things were great. The market was booming. We were doing great. Everything was fine until the realestate crash. And so we started using money that was savings okay . Investments, nontouchable money to keep this place going. Basically, the logic was, okay, things are going down. Our income is way down i mean, dramatically down but, you know, we have some pretty good savings. We can weather this. And so a year goes by another 100,000 or 200,000 gone. Another year goes by, again and again. And so at some point in time, the money the nontouchable money was just gone. You have to say, stop. And thats actually where dottie stepped in and said to me. We have to stop. When did you stop actually making the payments . We stopped in 09. We knew that we had to stop making the payments before the bank would act. We were forced to do this ruin our credit before the bank would take some action. I wanted to work something out with the bank. So, i talked to anybody anybody and everybody. The issue was. They didnt have our file. They didnt understand our file. They couldnt find our file. You talk to tom today. You talk to mary the next day. And during the first few months, wed get. Several calls a week. Sometimes several calls a day. And at night. At night all hours. They were abusive . Abusive. Very abusive. It was awful. It was awful. It seemed to be onesided. Give, give, give, give and never get anything back. And it just never ended. At some point, the actual foreclosure process began, and my understanding is you literally moved out of this house, where were sitting right now. We rented a place. We committed to a 2year lease, okay . We were paying 1,000 a month where we went to. And we moved out. Auction date gets canceled 1, 2, and 3. I thought i understood the process. Right. But i had no clue. After two years of renting another home, they had squatters in the home that they left. They contacted the lender, and the lender said, why not move back into your home . Thats exactly what they did. So we moved back. So, we incurred those costs, okay . Now, this is january of 2013. Okay. Okay . And so start again talk to the banks. When can we get this done . Can we do a short sale . Blah, blah, blah on and on and on. Any notices of foreclosure again during this period of time . Nothing. Nothing . Well, then in 14, all of a sudden now, this gearing back up for potential foreclosure auction. In the fall. In the fall. Thats right. Now, at some point, you activated under the law what was called a mediation. I wanted to sit across the table form somebody and speak to them about our situation, person to person, face to face, which we had not talked to anybody in four years. So. We do the paperwork and we get a mediation date on february 4th. And then half an hour before close of business on february 3rd, they call and say, can we reschedule . It really represents how weve been treated over the last four years. The mediation would end up getting rescheduled three times, but with another date looming, i told them exactly what to expect. Do not bid against yourself. The process will be very simple. Youll be there with the mediator, most likely a representative from the bank, who will be a lawyer, and youll be dialing up to somebody who has authority to make decisions from the lender. All you are to them is nothing more than a spreadsheet. I understand. And they have to decide specifically, do they want to hold on to this collateral and work a deal with the homeowner, or do they want to take it back . They may say to you, you owe x amount of dollars of the arrears. Were gonna do a forbearance on that and put them to the back of the loan and then strike up a new structured payment. Right. The second thing thats gonna happen is they could work out a deal and they could say, we want x amount of dollars down of goodfaith money. Okay. The other thing that could happen is you could go there next week and they could say to you, oh. We need more documents now that weve had this discussion, and so. Really . Of course. You have the right to say no. You have the right to say to the mediator, enough. Go ahead and start foreclosing on this property. Let us know when the auction date is, and were moving on with our life, guys, because were tired of you controlling our emotions. Exactly. In our own home. Because what happens is that the home that you loved, you resent, and the home didnt do anything to you. Exactly. Remember, next weeks always about numbers. Thats all it is. Its not about emotion. They dont care about you. Trust me. Say, look, guys, just tell me, where do we stand here . Weve reached a point in our life and want to move on. Thats right. Thats what you need to do, okay . And let us know what happens, okay . And i think itll work out. We appreciate so much your help. Dan and dottie finally got their mediation. Well tell you exactly what happened. Plus, what options do you have to get out of your realestate trouble . Im going to tell you, up next. [ woman vocalizing ] many people clean their dentures with toothpaste or plain water. And even though their dentures look clean, in reality theyre not. If a denture were to be put under a microscope, we can see all the bacteria that still exists on the denture, and that bacteria multiplies very rapidly. Thats why dentists recommend cleaning with polident everyday. Polidents unique micro clean formula works in just 3 minutes, killing 99. 99 of odor causing bacteria. For a cleaner, fresher, brighter denture every day. So strap yourselves in for action flo Small Business edition. Oh, no im up to my neck in operating costs ill save the day for plumbers and bakers and scapers of lawn, shes got insurance savvy you can count on. You chipped my birdbath now youre gonna pay not so fast i cover more than just cars and trucks. Action flo did somebody say insurance . Children flo action flo cut can i get a smoothie, please . Ooh they got smoothies . For me. Welcome back. Im bob massi, the property man. Weve talked a lot about loan mods and short sales and bankruptcies how they can rescue you from a mortgage nightmare. But like Everything Else, they have to be done right. To understand how to navigate the realestate landscape, you first have to understand recent history. We had the big boom. Properties were selling left and right. And, of course, we got a little too big for ourselves. The prices went up too much. We developed too much at one time. And, of course, with it being as easy as it was to obtain a mortgage, the market crumbled. Overbuilt and oversold. Absolutely. Soon millions of people were having trouble paying back the money that they had borrowed. Putting people in a position where they dont have any equity in their homes. They also may be in the position where they cant afford the home that theyre in. Everything happened so fast. I mean, the banks when people started to default on their mortgages, they were foreclosing left and right, and that really was what started the downfall of the realestate market. It was a wave. Just about every person that came in to my office had some sort of issue. Every Single Person i really knew in our community had the issue doctors, lawyers, teachers, police officers. It was truly heartbreaking at times to sit across from someone who was in a situation where all they wanted was a piece of the american pie. They paid whatever they had to pay for the house because the prices were so overinflated at the time, and they worked so hard to try to keep their property, and it just got to the point where they just couldnt do it anymore. But when push came to shove, they banks were just not interested in doing much about loan modifications. Lenders are very quick to get you into a default situation, but then you may be stuck in limbo for six, nine months, maybe even a year while youre trying to work something out. I had some lenders tell the client pointblank, if youre not in default, were not gonna look at your file. The bank essentially gave you a choice of either staying current, which is not possible for many people, or destroying your credit by being 60, 90, 120 days past due. The hamp was the Homes AffordableModification Program touted by the federal government. Lots of money went towards that program, lots of press, and clients would go ahead and make the three trial payments, supply all the paperwork, go through, jumping through all the hoops possible, and then the bank would say, well, we need some more time to really look at this. The neverending updating process. Often, the banks would ask for financials or your last two pay stubs or your most recent tax returns. You are going through these call centers and getting a different representative every time you call in, and youre not getting anyone that has any knowledge about that particular file or about that client or borrower. And then if Nothing Happened internally within their department in 30 days time, they were again asking for the same information, and you had to provide it again. If you are having a meaningful conversation with someone at the bank, many times, they didnt have the authority to make a decision. So, they would have to route it through their supervisor or through this department, and this department doesnt take incoming calls or emails or faxes, so you are negotiating with someone behind an iron curtain. Anyone hoping for a loan modification needs to write a letter explaining exactly what their hardship is. Ive spent so much time and energy creating these beautiful hardship letters to really try to give a personal element to have the bank look at my client as a person and as a family, and i dont think they ever read it. I dont, either. They couldnt keep their home, so the alternative was stay there till youre foreclosed on or try to short sell. So, you have to actually list the property with a realtor and get an offer for a purchase, and then we approach the servicer or the lender to get approval. Thats when youre handing over, once again, all of those financials. Even if you do get approved, there are still potential problems. The mortgage debt relief act of 2007 allowed people to exclude from their taxes the forgiveness of debt if it was due to a decline in the homes value or the taxpayers financial condition. And thats only for primary residences, money mortgages, or seconds that were used for improvements to the home. The income tax is forgiven. But that law expired december 31, 2014, so if youre looking to do a short sale or a loan modification, well, be prepared for a big tax bill next year. So, if the bank is forgiving 200,000 of your mortgage, they would count that as income, meaning that your overall income for the year is not only what you were making but the debt thats forgiven, which is gonna kick you into a higher tax bracket and have Tax Liability for you. And just because a bank agrees to a short sale or loan modification, you are not necessarily off the hook for the money owed. Make sure you read the fine print. A deficiency is basically the difference between what you owe and what the property sells for. That doesnt necessarily mean the debts forgiven. What happens to that deficiency . Every state has different rules, but here, the bank could sue for that difference. You could do the short sale, go through all the steps, jump through all the hoops, and if they didnt specifically state in their shortsaleapproval letter that this deficiency is waived, they could come after the short sale and sue you. And then a lot of people are still forced into bankruptcy. If there were no other options left, bankruptcy tended to be your hail mary to get you out of that debt. It wasnt a great situation or a resolution for everyone. There are a lot of people out there that still dont have the credit to be able to go out and purchase a home. Folks that have gone through this, i think, are a little bit gunshy to jump back into a mortgage. When you lose your home, you just dont disappear. So now theyre turning to the rental market, and theyre getting past their delinquencies and theyre gonna be in a position to be able to purchase again soon. I know all this information can be confusing. When we come back, im gonna break it down in the massi memo. 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