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Mar. 06, 2009
Copyright © Las Vegas Review-Journal

Nevada housing market still suffering

18 percent of loans either delinquent or in foreclosure in last quarter of 2008

By JOHN G. EDWARDS
LAS VEGAS REVIEW-JOURNAL
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Homes are shown with the Las Vegas Strip from Exploration Peak at Mountain's Edge on Thursday.
Photo by K.M. Cannon

The number of residential mortgage loans in Nevada that are either delinquent or in foreclosure reached 18 percent in the fourth quarter of last year, second only to Florida's 20 percent rate, the Mortgage Bankers Association reported Thursday.

"It doesn't look good," said Keith Schwer, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas.

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    • The percentage of residential loans nationally that are delinquent or in foreclosure ran 12 percent, six percentage points less than in Nevada.

    Nevada's 18 percent rate includes 11 percent of loans that are past due, an increase of more than 2.5 percentage points over the third quarter. Properties going through foreclosure, the other component, jumped 1 percentage point to 6.6 percent.

    With the high delinquency rate, Schwer fears the number of foreclosures will rise in Nevada, particularly given the state's high unemployment rate.

    "That creates a lot of economic pressure on households that have a mortgage," he said.

    But Brock Davis, president of US Express Mortgage in Las Vegas, said many of the subprime borrowers, those with weak credit ratings, already have lost their homes. Lenders have started resetting the rates on adjustable rate mortgages held by prime borrowers, Davis said.

    He hopes the number of foreclosures will be smaller, but he is concerned.

    "I'm getting questions from good credit people about 'How does it affect me if I walk away' (and allow the lender to foreclose)," he said.

    "This new second wave is just as big as the first wave and continues until December 2011," Davis said.

    "My personal hope is that the second wave of better credit homeowners have more credit character and won't have foreclosure rates as high as the first wave of poorer credit homeowners."

    Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.

    DELINQUENT HOME LOANS
    Area Year-end 2008 Sept. 2008
    Nevada 17.7% 14.1%
    Nation 11.9% 10.3%
    California 13.3% 10.9%
    Arizona 14.1% 11.3%
    Source: Mortgage Bankers Association
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    Bill Stathacopulos wrote on March 21, 2009 06:49 PM: I come to Las Vegas regularly and I usually stay at least two months at a time.

    It would be appreciated if you could recommend me an affordable extended Place to stay(Hotel or Motel) with Kitchen. Thanks


    Sincerely

    Bill Stathacopulos





    jake valentine wrote on March 06, 2009 02:36 PM: Why shouldn't foreclosures count for appraisals? They still reflect the amount that somebody is willing to pay to buy any given property. If that value was 20% less, then perhaps that is the current value of the homes in any given area.

    Additionally, your "simple" solution is absolutely unacceptable if it means taking money from people who were responsible and redistributing it to others. I realized my house in Silverado Ranch was selling for waaaay more than it was worth in 2005 and sold it. I shouldn't have to pay one penny to those who bought more than they could truly afford.


    Really? wrote on March 06, 2009 09:37 AM: Thank you Captain Obvious! When you report daily about how bad our housing market is it ceases to be news and becomes a dead horse.


    I, Teacher wrote on March 06, 2009 07:30 AM: Hey, Check it Out!

    Nevada is ranked first in something!


    Sunshine wrote on March 06, 2009 07:30 AM: Foreclosures should not be included in determining appraisals. Our neighborhood just took a 20% hit because of a speculator's foreclosure. Now, neighbors that are current on their mortgage cannot refinance because there is not enough equity in their home. Now they may face foreclose in the near future and the downward spiral continues. A simple solution would be to waive the equity-to-loan ratio and reset all mortgage rates to 3%.