With much adieu the government announced on Tuesday February 10th that over $75 billion would be spent trying to help as many as 9 million American homeowners avoid foreclosure. This will be accomplished through government sponsored loan modifications and refinance options. One glaring problem with this plan for those on the West Coast is that it restricts loan modification and refinance help to those who owe no more than 105% of their home's current market value. In states like California, Arizona, and especially Nevada where home prices have plummeted 50% or more in the last two years, this restriction renders most of the home owners in these states who would need to take advantage of such a plan ineligible.

The government also imposes other criteria for the bailouts including the need to prove a significant decrease in income as well as financial hardship. It then juxtaposes this with a requirement stating that the new mortgage payment amount for any prospective homeowner cannot exceed 31% of their gross monthly income. Applicants must also be owner occupants and have mortgages that do not exceed a balance of $729,750.

Critics of the plan point out that there is no provision for second mortgages to be refinanced or modified and also argue that with it's extensive list of requirements the plan will not help the very homeowners who need it most. This includes most Las Vegas residents. In a recent article in the Las Vegas Review Journal, Mark Baker, a loan officer with Meridias Capital was quoted as saying, "Up to 105% of the value? I think this will help a lot of people in the Las Vegas area. In fact, it may be more than three or four people, or even up to 10. Another example of how lots of talk, lots of money spent and so few people can use a new government program. Sorry for my sarcasm."

As a local foreclosure expert, I have witnessed more and more homeowners and investors in the Las Vegas area succumb to foreclosure because they are unable to find refinancing packages for their properties. It is unfortunate that such a large scale plan from the Federal Government is not structured in such a way that it can benefit those people who could most utilize it. Most homeowners and investors in hard hit areas, like Las Vegas, California, Arizona, and Florida will not be able to take advantage of the relief offered in this new plan.