Many homeowners in Nevada were relieved to hear about the state’s foreclosure help program that was passed by the state assembly in June and which will take effect on July 1.

But homeowners need to know that there are restrictions and requirements for participants. They should approach a state HUD-certified foreclosure help counselor or visit the web site of the Nevada Supreme Court and check if they are eligible to participate in the program.

Basically, the program helps homeowners work out an affordable repayment scheme with their lenders through a court-supervised mediation.

Homeowners and lenders will each pay $200 for the mediation process and non-native English speakers need to bring their own translators.

The major limitation of the foreclosure help program is the scope of the program. It applies only to borrowers who receive a default notice starting July 1, which excludes many borrowers who have already defaulted.

Homeowners and advocates are sad about the restriction because many homeowners purposely defaulted when their lenders refused to modify their loans because they have not been delinquent.

In response to complaints about the scope of the program, the state Supreme Court advised homeowners who have defaulted before

July 1 that they can still participate in the program as long as they can get the consent of their lenders.

Bill Uffelman, president of the Nevada Bankers Association, said that many homeowners can still negotiate with their lenders even without the court mediation law.

Another limitation of the foreclosure help program is its application to owner-occupied homes only. Court mediation will not be provided for investors who speculated on home prices.

Unemployed homeowners are also exempted from the program. A bank representative said that any borrower who does not have a job can never be helped by the program. He added that only homeowners who have adequate monthly income and who did not buy houses beyond their financial capabilities will be helped by the program.

The other major limitation of the foreclosure help program is the voluntary nature of the loan modification part of the mediation process. The participation of the lender in the court-supervised mediation process is mandatory, but the achievement of a modified loan is not mandatory. Much of the process still depends on the lenders’ policies and their representatives in the mediation process.

Additionally, homeowners who have already filed for bankruptcy or who have already surrendered their houses to their lenders are not eligible for the foreclosure help program.