i'm bob massi. i'll see you next week. [ woman vocalizing ] >> i'm bob massi. for 32 years, i've been practicing law and living in las vegas. i help people with all sorts of real-estate problems, from trying to save their homes to closing major deals. eight years ago, 6,000 people a month moved here, looking for employment and affordable homes. little did anyone know that we would become ground zero for the american real-estate crisis. now, it's a different story. the american dream is back. we're gonna meet real people who faced the same problems as millions across america, and we'll dive deep into a city on the rebound because las vegas was a microcosm of america, and now vegas is back. [ woman vocalizing ]

thanks for joining us. i'm bob massi. civil war commander george custer is said to have uttered the famous words, "it's not how many times you get knocked down that counts. it's 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 real-estate crisis in america, and today it is an american success story. ♪ lake las vegas is a beautiful, 328-acre lake that was actually man-made. 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 that's very rare -- to have a 300-acre 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. it's 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 hard-packed 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. we're proud that we're in henderson. >> absolutely. >> you know, as a town, schools, parks, families, shopping -- it's 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! it's even better than before!" and that's kind of what i think las vegas is -- we're better than before. we brought in 28,000 tons of sand, and it's intended to be a lifestyle, not just for the weddings, and that's a nice site for that, but for the paddleboarding, the kayaking, and then the duffy boats so that when you're 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, it'd 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 high-end 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, it's just so dramatically changed. it's in great condition. i'm assuming, at least for those golfers out there watching this, this is pretty affordable. >> this is affordable. i mean, it's a top-5 public course. it's the only signature course that's 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, we're 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 didn't know when. >> the rebound has been dramatic. real-estate prices stabilized. the once-closed hotels reopened. and, most importantly, the people who once fled the area -- well, they've returned. >> once you're 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%. it's a "show me, don't tell me" kind of a strategy. we've been very low-key, but once, now it's time to show off, we are, and i think when you see it, you really like it. ♪ >> after a quick break, we'll 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 ] innovative sonicare technology

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♪ >> welcome back.

i'm 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. let's go meet them right now. ♪ so, now we're 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. we're gonna give them some direction as to what they need to do to try to save their home, but, remember, it's been a 4-year battle, and i'm not sure what the final resolution is going to be. dottie, it's 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 real-estate 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 that's 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 didn't have our file. they didn't understand our file. they couldn't find our file. you talk to tom today. you talk to mary the next day. and during the first few months, we'd 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 one-sided. 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 we're sitting right now. >> we rented a place. we committed to a 2-year 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?" that's 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. >> that's 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 we've 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. you'll be there with the mediator, most likely a representative from the bank, who will be a lawyer, and you'll 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.gonna do a forbearance n that and put them to the back of the loan and then strike up a new structured payment. >> right. >> the second thing that's gonna happen is they could work out a

deal and they could say, "we want 'x' amount of dollars down of good-faith 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 we've 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 we're moving on with our life, guys, because we're 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 didn't do anything to you. >> exactly. >> remember, next week's always about numbers. that's all it is. it's not about emotion. they don't care about you. trust me. say, "look, guys, just tell me, where do we stand here? we've reached a point in our life and want to move on." >> that's right. >> that's what you need to do, okay? and let us know what happens,

okay? and i think it'll work out. >> we appreciate so much your help. >> dan and dottie finally got their mediation. we'll tell you exactly what happened. plus, what options do you have to get out of your real-estate trouble? i'm going to tell you, up next. [ woman vocalizing ]

♪ >> welcome back. i'm bob massi, the property man. we've 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 real-estate 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 don't have any equity in their homes. they also may be in the position where they can't afford the home that they're 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 real-estate 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 couldn't 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 you're trying to work something out. >> i had some lenders tell the client point-blank, "if you're not in default, we're 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 affordable modification 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 never-ending 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 you're 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 didn't have the authority to make a decision. so, they would have to route it through their supervisor or through this department, and this department doesn't take incoming calls or e-mails 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. >> i've 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 don't think they ever read it. >> i don't, either. they couldn't keep their home, so the alternative was stay there till you're 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. that's when you're 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 home's value or the taxpayer's financial condition. >> and that's 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 you're

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 that's 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 doesn't necessarily mean the debt's 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 didn't specifically state in their short-sale-approval 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 wasn't a great situation or a resolution for everyone. >> there are a lot of people out there that still don't 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 don't disappear. so now they're turning to the rental market, and they're getting past their delinquencies and they're gonna be in a position to be able to purchase again soon. >> i know all this information can be confusing. when we come back, i'm gonna break it down in the massi memo. [ woman vocalizing ] thousands of people came out today to run the race for retirement. so we asked them... are you completely prepared for retirement? okay, mostly prepared?

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♪ >> welcome back. i'm bob massi, the property man. time now for the massi memo. after not being able to get a loan modification, dan and dottie -- well, they moved out of their home, only to be asked by the bank two years later to move back in. three years after that, they finally mediated. so, what happened? they agreed to let the bank have the house back in exchange for the deficiency being waived. whatever they owed on the house, it's now waived. you can find info on our website about short sales and everything else that we've covered, but let's review some of the basics. a short sale means that you sell your home, with the lender's consent, for less than what you owe on it. for many people who find their

homes underwater, a short sale does offer a way out. but it's not always so simple. the lender requires a showing of what we call "hardship" -- for example, loss of income, medical emergency, death of an income-producing member of the family, and other things. now, you're gonna be asked to provide tax returns, w-2s, or profit/loss statements if you're in business for yourself. the waiver of the deficiency is crucial for the short sale. that means the lender agrees not to come after you for the amount you still owe after selling the home. always get an opinion from a tax professional before your short sale so that you know exactly where you stand. the lender may forgive the debt, but uncle sam, if it's not a primary residence -- well, they could come after you for income. as always, we've got all the latest info on our website for things we've covered today. go to... also, don't forget to send me your questions or property

stories at... i'm bob massi. thanks for watching. [ woman vocalizing ] we've talked about anything that affected people and their money. from fox business headquarters and new york city, the new "wall street week." anthony: welcome to "wall street week," the show of record for the long-term investing, i'm anthony scaramucci. >> and i'm maria bartiromo in this weekend for gary kaminsky. good to see you, anthony.