Nearly half of Nevada residents who were in foreclosure last year hadn’t heard of the government’s Home Affordable Modification Program (HAMP), and only 3 percent said they’d been helped by it, according to a survey conducted on behalf of the Nevada Association of Realtors (NVAR).

Nearly half of Nevada residents who were in foreclosure last year hadn’t heard of the government’s Home Affordable Modification Program (HAMP), and only 3 percent said they’d been helped by it, according to a survey conducted on behalf of the Nevada Association of Realtors (NVAR).

NVAR’s "Face of Foreclosure" survey also found that nearly one in four distressed homeowners reported engaging in a "strategic default," in which they chose to stop paying their mortgage despite having the financial ability to stay current on their loan.

Nevada has had the highest foreclosure rate in the nation for most of the housing downturn. During the fourth quarter of 2010, one in 31 Nevada homes was subjected to some kind of foreclosure-related filing — more than five times the national rate, according to the latest numbers from RealtyTrac.

NVAR said its report doesn’t identify a single "cure-all," but suggests that more can be done to make distressed homeowners aware of resources available to them.

The report "also reinforces our belief that lenders would do well to speak to their customers before foreclosing and to continue streamlining their short sale processes, since short sales are one viable alternative to foreclosures," said NVAR 2010 President Linda Rheinberger, broker-owner of One Source Realty and Management in Las Vegas, in a statement.

NVAR said the survey shows initiatives are needed to ensure that consumers are not unfairly penalized by deficiency judgments, and that loan servicers have enough staff to answer phones and provide homeowners with information about their loans.

The 500 distressed homeowners surveyed in August had received at least one foreclosure notice in the previous 12 months, such as a notice of default, notice of auction sale, or bank repossession.

While nearly half had lost their homes when they were surveyed, another 16 percent had managed to avoid foreclosure and 30 percent were still in the foreclosure process when they were surveyed.

The vast majority of distressed homeowners surveyed — 86 percent — said they had attempted to contact their lender during or before the foreclosure process. Nearly 40 percent contacted a Realtor for advice, but only 23 percent contacted a foreclosure counselor.

Among those who had contacted a lender, 58 percent said the lender was "not willing at all" to work with them on foreclosure alternatives, and only 12 percent said the lender was "somewhat" or "very" willing.

In focus groups conducted in conjunction with the survey, "participants consistently cited their inability to talk to anyone authorized to take real action on their loans," the report said.

While 41 percent of distressed homeowners said they’d never heard of the Obama administration’s loan modification program, HAMP, another 25 percent said they’d used the program.

But 15 percent said it had made no difference to their situation, and 7 percent said HAMP made things worse. Only 3 percent said the HAMP program had helped them.

Another 5 percent said they didn’t qualify for HAMP, and 24 percent said they’d heard of HAMP but didn’t use it.

Even fewer distressed home owners had heard of the government’s Home Affordable Foreclosure Alternative (HAFA) program, which provides incentives for short sales and deeds-in-lieu of foreclosure.

The survey found 61 percent of those hit with foreclosure-related filings had never heard of HAFA. While 10 percent of those surveyed said they’d used HAFA, only 2 percent said it helped.

More than one-third of distressed homeowners — 35 percent — said they’d engaged in a short sale. But while 10 percent said a short sale helped them, 16 percent said it made no difference to their situation, and 9 percent said it made things worse.

Regardless of whether or not they had experience with short sales, 56 percent said short sales would not be helpful to most homeowners undergoing foreclosure because they are too complex, confusing, and slow.

A majority — 61 percent — said simplifying the short-sale process so that homeowners who are in default can quickly sell their homes would have helped them.

Although 25 percent were unsure whether they’d taken out a prime or a subprime loan, 45 percent said their loan had an adjustable rate. More than half (52 percent) identified themselves as prime borrowers and only 19 percent said they’d taken out subprime loans.

Most distressed borrowers reported "life-altering events" in the 12 months leading up to foreclosure. Six out of 10 distressed homeowners said they or another wage earner had lost their job during that time period, and 32 percent said they’d had unexpected medical bills.

The survey found that most hit with foreclosure filings made between $24,000 and $72,000 per year, and that many were spending a large proportion of their monthly income on housing, making them more vulnerable to unexpected expenses. About 65 percent of those surveyed said they were spending 33 percent or more of their monthly income on housing.

More than 30 percent of distressed homeowners 65 and older said they ended up in foreclosure because they opted for a strategic default, compared to less than 15 percent of those 35-44. Families with children were the least likely to engage in the practice, the survey found.

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