FORECLOSURE REPORT: Foreclosures in Las Vegas drop in January - Business

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Feb. 14, 2009
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FORECLOSURE REPORT: Foreclosures in Las Vegas drop in January

Index shows 25 percent dip across U.S. as prices tumble

By HUBBLE SMITH
LAS VEGAS REVIEW-JOURNAL

Housing in Southern Nevada

A foreclosed home is shown at 21 W. LaMadre Way in North Las Vegas on Friday. Foreclosures.com reported 2,609 foreclosures in Las Vegas in January, down from December but up from a year ago.
Photo by Jeff Scheid.

A bank-owned home is shown at 21 W. LaMadre Way in the 89031 zip code of North Las Vegas.
Photo by Jeff Scheid.

Las Vegas home foreclosures declined 20 percent in January to 2,609 from 3,283 the previous month, online source Foreclosures.com reported Friday.

However, the number increased 48 percent from 1,763 in January 2008. Las Vegas had 31,416 real-estate owned, or bank-owned, homes in 2008 and some analysts are projecting as many as 50,000 foreclosures this year.

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Clark County preforeclosure filings, or the process that starts with a notice of default, rose slightly in January to 6,050, compared with 5,765 in December and 5,734 in the same month a year ago.

Foreclosure.com's U.S. Foreclosure Index showed a 25 percent drop nationally as government and lender programs have combined with low interest rates and low housing prices to slow new foreclosures.

Completed foreclosures dropped to 72,694 in January from 97,841 in December, the lowest level since April. Preforeclosures dropped 12 percent to 166,860.

Virtually every state saw a drop in foreclosures, said Alexis McGee, president of Sacramento, Calif.-based Foreclosures.com. California and Florida, two states hit hard by foreclosures, saw January numbers decline 31 percent and 21 percent, respectively. Nevada was down 20.6 percent at 3,207 foreclosures in January.

While others have speculated that foreclosures would continue to rise, McGee stands by her view that the worst is past. The media are still focused on foreclosures, but the story now is the recovery of real estate, she said.

"Investors and first-time home buyers are coming off the sidelines and buying homes," McGee said. "These market changes and efforts by some lenders to modify loans is changing the dynamic of the real estate market."

REO specialist Troy Kearns of Gavish Real Estate said he took on 60 new foreclosure listings in the past week and now has 350, up from 250 a month ago. He has two properties in foreclosure at more than $1.5 million.

"What happened is Fannie Mae's moratorium is over and they flooded the market," Kearns said. "I know some guys who got slammed who are handling Fannie Mae properties and they hadn't done anything for two months. Watch February and March take off."

Las Vegas-based research firm Applied Analysis also reported a drop in lenders taking back homes. January foreclosures totaled 1,124, down from 1,712 in December, but up 16.2 percent from 967 in the same month a year ago.

There were 6,171 active foreclosures, or units in the foreclosure process, but the title has yet to go back to the bank.

"That tells us there's a significant number likely to be taken back," Applied Analysis principal Brian Gordon said. "Looking at the data, it would appear foreclosures remain elevated and we haven't seen a significant correction yet. We're going to trudge along here for a while, I think."

The Obama administration announced a $50 billion initiative this week to help strapped homeowners. Some say banks are worsening the foreclosure crisis and undermining the government's efforts to keep people in their homes.

"I don't know how that's going to play out," Kearns said of Obama's plan. "If it slows things down, it's only a bandage on a blown-out tire. At a certain point, you've got to let the market correct itself. Things are selling. People are still buying homes."

Alan Schlottmann, economics professor at the University of Nevada, Las Vegas, said the Fed is concerned about foreclosures creating further downward pressure on home prices. Las Vegas saw a 34 percent decline in median home prices last year to $163,000, according to Home Builders Research.

"They're concerned we might overshoot on the downside like we did on the upside," Schlottmann said. "Existing aid programs are triggered once a homeowner falls behind. Let's have a program to catch them before they go to foreclosure. Let's identify people who can make it with a little help before they get in arrears and foreclose."

Las Vegas businessman Robert McKenzie of Macro Global Concepts met Thursday with Sen. Harry Reid, D-Nev., in Washington, D.C., to encourage lawmakers not to give more bailout money to the banks. Lenders have no incentive to dispose of foreclosed properties at a discount or to modify loans for distressed borrowers when they're getting bailed out by the government, McKenzie said.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.

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Please enter your name Name: Please enter your email Email: Please enter a comment COMMENTS : (word count limit is 300) You have reached the maximum number of words allowed Current Word Count: Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background. perry wrote on February 28, 2009 05:52 PM: LENDER ALSO HAVE FAULT THEY SHOULD INVESTIGATE perry wrote on February 28, 2009 05:48 PM: will the lender should i repeat should investigate what on the application my application was forge i didn't found out untill i got a copy from my lender. my monthly income was wrong my signature was transpose on the application my mortgage lady has a preliminary trial on the march 19. any1 out there who has cindy birkland of sapphire mortgage she has trial on march 19 9 am district court 11 d wrote on February 14, 2009 11:46 AM: Freddie and Fannie mae are sitting on a huge ghost inventory. and there will be more layoffs in the casino industry The worst has not yet past Color benefits wrote on February 14, 2009 10:16 AM: And what is the current position of the Congressional "Black" Caucus? I have not heard from them, and I suspect they stay low. Beleive it or not, but there is such a color-based group in congress and you can google it. I last heard they wanted more bailout money for black people. Were they behind Acorn getting millions? And when money is given away, Jessie Jackson is not far away. Color Loan, the best you can get!! wrote on February 14, 2009 10:08 AM: CRA + Stupid Banks + Lying Borrowers = Excess Foreclosures. CRA= community reinvestment act. The redistribution-of-wealth scam since the 70s. It created "Color Loans", the best loan you can get! You just have to be a person of color. $100,000 Question wrote on February 14, 2009 09:54 AM: I resent money for anyone: 1) unemployed and squatting in home, or 2) who lied on loan app. Money should help the honest borrowers who are upside down (e.g., $100,000 from $300,000 loan and $200,000 value). Who is going to help them? There is no Acorn to help White people. Trish wrote on February 14, 2009 09:51 AM: LV had 31000 bank owned homes in 2008 and will have 50000 in 2009, for a total of 81000? Or what is the total balance to be?? Preforclosures of 166000 in US or Clark County? Must be Clark County, correct? Need better synapsis in the article?? If Clark County, truly amazing numbers! And what like 2500 homes sold in Dec.08??? Wow ! what an inventory to work thru !!!! RobertT wrote on February 14, 2009 09:27 AM: According to Mark Hanson of Field Check Group (Oakland,CA), a real estate analyst, 66% of all foreclosed homes have yet to be listed for resale and do not appear in the foreclosure numbers for sale. These unlisted homes are what is know as the "shadow inventory". Assuming he is correct, we have a long way to go before this inventory is worked through and prices will continue to fall. Marc D wrote on February 14, 2009 09:24 AM: this is a non-story,Freddie and Fanny plus a couple of the larger banks suspended foreclosures starting in December until the end of this month,they plan on starting foreclosures again soon so the falling number is artificial and will soon spike due the recent hold being stopped. you can find these stories on the web all over the place, I read about it on Drudge link. Freddie and Fanny hold aprox. 50% of this country's mortgage paper so when they stopped foreclosures for the holidays the number was bound to drop by a large percentage. Sunshine wrote on February 14, 2009 08:15 AM: Homeowners who have excess savings and are current with their mortgage payments, but are upset because their home value have dropped and are unable to refinance because they cannot meet the banks new equity-to-loan requirement, have stopped making their mortgage payments to qualify for a reworked mortgage. This is their only option because if they remain current with their mortgage payments they do will not qualify for a mortgage workout. Solution: Stop making your mortgage payments and live in your house free for months, reduce the loss on your home value, and get a lower interest rate. Thank you! Result: Bad behavior is rewarded. Good behavior is punished. Senseless. In return for all the bailout money the banks have received, the banks must allow all mortgage holders to refinance at a government set rate (3 or 4%), with absolute minimum fees (the banks made their exorbitant fees on the bogus first financings) and with no equity to loan requirement. The government could guarantee to the bank their new higher equity to loan ratio amount of 20 to 25%. Thus the banks will not assume any additional mortgage risk, and the taxpayers are only on the hook for 20 – 25% of the loan value in the event of a default. Result: Housing prices will stabilize without bankrupting the government or the taxpayers because of the banks corruption and greed. As it is now, foreclosures will continue because most Las Vegas homeowners with mortgages do not qualify for refinancing because they lost too much equity in their homes and cannot meet the banks new 20 to 25% equity to loan requirement. Read All Comments