In analyzing the first six months of Clark County Assessor records, Nason found that banks are shedding single-family properties at a much faster pace than they've been acquiring them through foreclosure.

Through June, financial institutions acquired 6,472 real estate-owned properties and sold 11,254, the broker-owner of Residential Resources reported. He defines an REO, or bank-owned property, as any transaction in which the lender acquired the property through a trustee sale.

Las Vegas-based SalesTraq showed REO inventory declining from nearly 16,000 in January to 13,200 in June.

The banks' voluntary foreclosure moratorium, combined with increased investor activity in Las Vegas, may explain the drop in foreclosure inventory, Nason said.

That's about to change. After the moratorium was lifted in March, bank-owned acquisitions jumped 55 percent in May and nearly 40 percent in June.

"If this trend continues and the amount of properties disposed of stays relatively constant, then we can expect to see a new glut of REOs on the market in the third quarter and, most likely, continued downward pressure on pricing," Nason said in a blog posted at residentialresources.com.

He's heard that Fannie Mae and Freddie Mac foreclosures could increase by 400 percent to 500 percent by the end of the year.

"I don't see the huge wave, but we hear about the inventory being held back," said Mercedes Tan, owner of Preservation West, a local business that cleans and maintains foreclosed homes. "It's a property tax issue. The banks don't want to take on property tax."

Tan said she gets about 15 homes a week, primarily from Wells Fargo. She takes over a lot of homes that are facing homeowners' association fines for dead lawns and health department notices for green water in swimming pools.

Although the first two waves of foreclosure losses came from subprime loans and borrowers who defaulted when their adjustable-rate mortgages reset -- many of them speculators -- the next wave will be prime loans, said Whitney Tilson, principal of New York-based investment firm T2 Partners.

These defaults will be due to job losses and home price declines that have left one-fourth of homeowners "underwater," owing more on their mortgage than their house is worth.

"What we're seeing in housing is prime borrowers and people who weren't speculating now starting to default," Tilson told the Review-Journal. "There are sobering implications for expected defaults, foreclosures and auctions in 2009 and beyond, which promise to drive home prices down further."

Christine McNaught of Windermere Realty said bank-owned properties are still getting multiple offers in Las Vegas, which is exactly what the banks want. She wrote 50 offers in one week and only 10 percent went through. They were cash closings in 10 to 20 days.

Her office is being assigned about five foreclosures a month from Wells Fargo and other banks.

"You're not getting a huge influx of foreclosures on the market right now," McNaught said. "I doubt if they're going to flood the market with 20,000 foreclosures. We haven't seen it."

Her data for June showed 12,545 properties for sale in Las Vegas and 12,821 properties in escrow, awaiting closing. Of those for sale, 3,266 are bank-owned and 5,296 are short sales, homes offered at less than the mortgage balance and requiring lender approval.

The actual number of homes available for sale in Las Vegas, including foreclosures and short sales, is much smaller than the 20,613 units reported by the Greater Las Vegas Association of Realtors, industry observers say.

Las Vegas-based business advisory firm Applied Analysis is showing 13,028 properties listed as available for sale, down 9,224 units, or 41.5 percent, from a year ago. About 5,100 units are identified as short sales, which leaves about 7,900 units available for sale in a normal transaction.

The number of units in contracted status -- either contingent or pending -- has risen dramatically in recent weeks to 13,456, Applied Analysis reported. Contingent sales (9,681) are contingent upon some other action taking place, while pending sales (3,775) are awaiting customary closing procedures.

Las Vegas continues to rank as one of the nation's most distressed areas for foreclosures.

For the first six months, Clark County foreclosures rose 84.3 percent to 23,588 from 12,800 in the year-ago period, Sacramento, Calif.-based investment advisory firm Foreclosures.com reported. Preforeclosures increased 34.8 percent to 47,467 from 30,922 a year ago.

Estimates for the next wave of foreclosures in Las Vegas range from 20,000 to 30,000 homes, though nobody has been able to verify those numbers, said Richard Lee, public relations director for First American Title Co. of Nevada.

He hasn't seen much of an increase in foreclosure activity.

"I don't know, it's kind of a lull," Lee said. "Banks are holding back and trickling it into the market a little at a time to sustain value. That is what's happening."

Lee said he thinks the foreclosure crisis in Las Vegas will worsen, but he added that nobody can accurately predict where the market is going.

"Anybody who says they have a handle on this is smoking something," he said.

The Obama administration's $75 billion Making Homes Affordable Plan and lenders' commitments to loan modifications have accomplished little to stem the tide of foreclosures, statistics show.

Since 2007, fewer than 500,000 loan modifications have been completed, according to the Center for Responsible Lending. Meanwhile, 60-day mortgage delinquencies surpassed 2.5 million and total foreclosure starts are approaching 3.5 million.

Keith Ernst, the center's director, in testimony before Congress, said that 1.5 million homes have already been lost to foreclosure, and that's just the tip of the iceberg. Another 13 million foreclosures are expected over the next five years.

"Many industry interests object to any rules governing lending, threatening that they won't make loans if the rules are too strong from their perspective," Ernst said. "Yet it is the absence of substantive and effective regulation that has managed to lock down the flow of credit beyond anyone's wildest dreams."

For years, mortgage bankers told Congress that subprime and so-called "exotic" mortgages were not dangerous. Regulators not only turned a blind eye, but aggressively pre-empted state laws that sought to rein in some of the worst subprime lending, Ernst said.

Ernst has a relatively simple idea to get loan servicers to implement the loan modification plans: Create a mediation program that would require servicers to meet with borrowers and evaluate their loan modification eligibility.

Nevada isn't the only state with a backlog of foreclosures. Egbert Oostburg of San Diego-based Project HomeWatch said banks are also holding back REO inventory in California and Arizona.

"It's that hidden wave you keep hearing about. When is it coming? That's the question," he said. "We're going to hit bottom eventually, but as long as the state and federal government put in these false bottoms, we're not going to move forward and reach the true bottom."

Oostburg said Congress recently passed a plan that allows banks with the Federal Deposit Insurance Corp. to lease foreclosed homes back to former owners for a five-year period, turning a nonperforming asset into cash flow while they ride out the market.

It will amount to a "land grab" by the banks, Oostburg said, when they kick owners out after the value returns and they can sell the home for a profit.

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

Las Vegas home foreclosures

Month	Acquisitions	Dispositions	REO inventory
June 2008	2,117	1,653	13,020
July	2,322	1,983	13,359
August	2,810	1,902	14,267
September	2,292	2,034	14,525
October	2,435	2,025	14,935
November	2,010	1,662	15,283
December	2,177	2,031	15,429
January 2009	2,386	1,817	15,998
February	2,240	1,827	16,411
March	1,861	2,533	15,739
April	1,300	2,737	14,302
May	1,769	2,502	13,569
June	2,486	2,855	13,200
Source: SalesTraq
Share & Save Leave Your Comment 52 Reader Comments Terms & Conditions The following comments are provided by readers and are the sole responsiblity of the authors. The reviewjournal.com does not review comments before publication nor guarantee their accuracy. By publishing a comment here you agree to abide by the comment policy. If you see a comment that violates the policy, please notify the web editor. Some comments may not display immediately due to an automatic filter. These comments will be reviewed within 48 hours. Please do not submit a comment more than once. 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. pearlwillman wrote on September 04, 2009 10:11 PM: I own a condo and have an outstanding balance of $140k, consisting of $104k primary and $36k secondary. I took the home equity to consolidate debts. At the time the property was valued at $163k but now it is valued at $134k. I'm looking to sell because i am engaged and will be moving into my fiancee's home. Check http://www.obamamortgagerelief.org/. If I have a buyer who offers me within say $5-7k of the outstanding, can i agree to assume a loan on the residual and pay the bank the difference over time with interest? The same bank holds both mortgages. victorsalmons wrote on September 03, 2009 02:36 AM: This whole stimulus package is just part of the governments long term plan to take away the power of the people. Are we going to do something about it or be lazy and think someone else is going to do it for us? It is time for a revolution. We need to overthrow the government and take our power back. Before there is nothing we can do about it. you should check http://www.obamamortgagerelief.org/ jhenry wrote on September 01, 2009 11:38 PM: I own a condo and have an outstanding balance of $140k, consisting of $104k primary and $36k secondary. I took the home equity to consolidate debts. At the time the property was valued at $163k but now it is valued at $134k. I'm looking to sell because i am engaged and will be moving into my fiancee's home. Check http://www.obamamortgagerelief.org/. If I have a buyer who offers me within say $5-7k of the outstanding, can i agree to assume a loan on the residual and pay the bank the difference over time with interest? The same bank holds both mortgages. jimwhenry wrote on September 01, 2009 02:10 AM: Check out http://www.obamamortgagerelief.org/ . There needs to be a program for the elderly but not quite to retirement age for mortgage modification when the have lost their job during this particular recession. I made a decent wage because I put my time into a company and now have no job. I am looking at $10 - to $12 hr jobs after working all my life. You can't make a mortgage payment on that kind of money. I will eventually lose my home. T W wrote on August 13, 2009 09:48 AM: In reading this article I find it accurate. It is a land grab. The banks flush with taxpayer money are NOT working to complete loan mods, but WILL foreclose on you and then do you a favor by leasing you back your own property for a period of time that best suits their needs. Yes keep the property on the books, at higher cost basis and delay taxes accrued to homeowner....so much for Obama's policies to "affect" some change and hope for those of us with 780 credit scores but no jobs to pay our mortgage. Zachary wrote on August 12, 2009 11:55 AM: I saw this same behavior in my website, where I work with foreclosures. jc wrote on August 12, 2009 01:23 AM: it's far from over ! Tan, owner of Preservation West, a local business that cleans and maintains foreclosed homes. honestly !!!!! does anyone really think a company who cleans a few houses a month knows whether or not more foreclosures are on the way ! get real ! Chris wrote on August 11, 2009 01:30 PM: "The number of U.S. households on the verge of losing their homes soared by nearly 15 percent in the first half of the year as more people lost their jobs and were unable to pay their monthly mortgage bills." The mushrooming foreclosure crisis affected more than 1.5 million homes in the first six months of the year, according to a report released by foreclosure listing service RealtyTrac. On a state-by-state basis, Nevada had the nation's highest foreclosure rate in the first half of the year, with more than 6 percent of all households receiving a filing. Arizona was No. 2, followed by Florida, California and Utah. Rounding out the top 10 were Georgia, Michigan, Illinois, Idaho and Colorado. Read More: http://www.housingnewslive.com/articles/housing-bottom.php another underwater home-debtor wrote on August 11, 2009 12:48 PM: Tobby and wettap are both wrong. What Ms. Tan is referring to is banks delaying to complete the foreclosure process. By not taking title, the bank allows the unpaid tax bill to continue to accrue to the home-debtor. The bank doesn't become liable for the property tax until they complete the foreclosure and take title. Precisely the reason they delay the foreclosure process. BTW, the federal govt. has zero involvement in any property tax issue, that is the province of more local taxing authorities. wettap wrote on August 11, 2009 09:51 AM: That is correct, Tobby. The government always gets its cut first. Any time that you purchase a foreclosed or seized property, the government will get its money from you (the purchaser) prior to ANYONE else getting paid. And good luck trying to persuade the Federal government that they are incorrect in any manner. If you want to fight it, you pay what they say you owe first, then fight it out in court with them. The Constitution protects you so long as you don't seek protection from the strong arm of the government. In their eyes, you are guilty until proven innocent. Read All Comments
Contact the R-J | Subscribe | Report a delivery problem | Put the paper on hold | Advertise with us Report a news tip/press release | Send a letter to the editor | Print the announcement forms | Jobs at the R-J Copyright © Las Vegas Review-Journal, 1997 - 2009 Stephens Media, LLC   Privacy Statement