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Oct. 10, 2008
Copyright © Las Vegas Review-Journal

Clark County foreclosures nearly triple through September

By HUBBLE SMITH
REVIEW-JOURNAL

Foreclosures have nearly tripled in Clark County through September and the number coming down the pipeline is growing, a California-based online foreclosure source reported.

Foreclosures.com counted 3,563 real estate-owned properties in Clark County taken back by lenders in September, bringing the year-to-date total to 22,543. That’s up from 7,704 in the same period a year ago.

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    • Clark County preforeclosures, which include notices of default and auctions prior to actual foreclosure, numbered 6,565 in September, compared with 5,360 in the previous month. The total through September stands at 49,364, already shattering last year’s total of 33,953.

    It’s the first comprehensive look at foreclosure numbers in the wake of the nation’s financial markets fiasco and congressional bailout. The analysis shows the foreclosure tidal wave is unabated.

    Nationwide, foreclosures rose 6.6 percent for the month, 25.8 percent for the third quarter and 82.6 percent from a year ago. Banks have kicked nearly three-quarters of a million owners out of their homes this year, including more than 107,500 in September, Foreclosures.com reported.

    Nevada continues to lead the nation with 77.8 preforeclosure filings for every 1,000 households, an increase of 115 percent from a year ago. Arizona is next with 74.6 filings, followed by Florida (64.2) and California (31.5).

    “Overall, looking at it right now, over 9 percent of households in Las Vegas are in foreclosure,” Foreclosures.com President Alexis McGee said Friday. “That’s not good because the national average is 2 percent. That’s the bad news.”

    Foreclosures remain on track to surpass 1 million by year-end and preforeclosures could end up near a record 2 million, she predicted.

    The numbers aren’t all glum. Preforeclosure filings actually dropped 2.4 percent in September, led by double-digit declines in California (38.6 percent), Michigan (36.2 percent) and Texas (13.1 percent).

    “Looking at Las Vegas, they’re definitely up and down,” McGee said. “They’re up in July, down in August, up again in September. There’s really no trend there. It’s kind of odd. It’s in a range.”

    The decline in preforeclosures is great news as the nation’s financial markets struggle to regroup in the wake of the credit market meltdown, McGee said. Especially in California, the drop in part is the result of new laws that require mortgage lenders to give financially strapped homeowners extra time to work things out before a foreclosure notice is filed.

    “That means in another month or so, preforeclosure filings probably will spike again because tens of thousands of overextended homeowners remain in financial trouble with their mortgages,” she said.

    Las Vegas will probably see a slowdown in defaults and foreclosures in the short term with the introduction of new government bailout programs, Steve Hawks of ReMax Platinum said.

    It will keep people in their homes for a while, but the long-term trend will most likely be an increase in defaults and foreclosures, he said. “The good news is that activity has picked up for now,” Hawks said. “The bad news is many homeowners are seeing their equity and for some of their nest egg wiped out.”

    Some homeowners who owe more than their home is worth may qualify for help. For example, if they live in the house, did not misrepresent their income on their original loan and can qualify for a loan at 95 percent of the current home value, they might be able to stay in their home, Hawks said.

    Unfortunately, a large percentage of original loans were done without income verification. If the homeowner cannot qualify for one of these programs, they’re probably “dead in the water,” he said.

    “One thing is certain, the people buying now at 50 percent less than their neighbors is obviously going to cause more foreclosures, short sales or writedowns as current homeowners upside down by 50 percent see the time and cost of recovery as just too far off,” Hawks said.

    Meanwhile, foreclosure sales continue to weigh heavily on home prices in markets with the largest price declines, according to Radar Logic’s Residential Property Index. The New York-based company tracks 25 metropolitan statistical areas, including Las Vegas, where the median existing home price dropped to $195,000 in September.

    Radar Logic Chief Executive Officer Michael Feder sees two processes at work in the nation’s housing markets.

    “On one hand, there is the traditional market process in which sellers and buyers negotiate a price and sellers frequently prefer to wait rather than significantly reduce their asking price,” he said. “On the other hand, there is the foreclosure sale process in which homeowners, banks and other financial institutions are motivated to sell quickly, so they discount their prices to effect a transaction.

    “What we are seeing now is a situation in which the latter process is driving prices down in markets with relatively high concentrations of foreclosures, while the traditional process is the primary driver of MSA-level prices in markets with lower rates of foreclosure,” Feder said.

    Tim Kelly, REO specialist for Brodkin Group, said thousands of REOs are coming down the pipeline as some 250 notices of default are filed daily in Clark County.

    “It will be kind of like a small avalanche,” he said. “But no one really knows for sure and hopefully the new bailout plan will help.”

     

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

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    Adam wrote on October 10, 2008 07:48 PM: There is misinformation in one paragraph...
    "Some homeowners who owe more than their home is worth may qualify for help. For example, if they live in the house, did not misrepresent their income on their original loan and can qualify for a loan at 95 percent of the current home value, they might be able to stay in their home, Hawks said"

    Its actually 90% of current appraisal if you are talking for the "Hope for Homeowners" program through hud which started Oct 1st. This is voluntary and banks are refusing to sign up. I was told by Citi this is only for government insured loans not for conventional loans? I spoke with two of my banks and neither said they were willing to participate. They are also unwilling to write down the loan at all. No wonder there are so many foreclosures the banks are dragging their feet and unwilling to budge on the loan amounts or interest rate. When the values drop +35% banks need to consider writing off part of the loan to avoid foreclosures!!


    Good "R" wrote on October 10, 2008 05:45 PM: It's me again, your neighborhood bimbo realtor.

    Now "R" is on board with us bimbo realtors.

    BUY, BUY, BUY

    Buy until it hurts. Use retirement money and kids college fund to buy most expensive possible house. (Most expensive house X 6% commission = happy bimbo realtor).

    Maybe if you fall behind in payment U.S. Government may bail you out! No risk to BUY, BUY, BUY!

    BUY, BUY is sure bet (like daily double in the 5th race at Meadowlands)



    T Ryan Outlaw wrote on October 10, 2008 05:38 PM: R is right on.....these prices will fall much further and they won't bounce back right away. It's smart to hold on to your money for about another year in order to maximize the probability to catch the marker at the bottom.

    The Buy Baby Buy...Buy Here, Buy Now philosophy is an appreciated attempt to stimulate the economy but not real smart based on the experts' opinions.

    2009 will be one long year in Vegas and in the country. Time for CHANGE at the top.


    R wrote on October 10, 2008 05:13 PM: Bad "R":

    Jeeezzzz....... sorry about that.

    Your right!

    Everyone, buy as much as you can afford from your saved up money. make sure that the realtors and loan officers get every last penny. Don't worry if the prices continue to fall. Remember, they will rebound in about 15 to 25 years and that's not a long time when you think about the age of the earth or dinosaurs.

    I would suggest getting into an adjustable 5/1 arm note!


    Burn wrote on October 10, 2008 05:10 PM: Burn baby burn. Disco inferno!


    BAD "R" wrote on October 10, 2008 04:59 PM: "R",, you are BAD person to tell buyer to hold on to money. Buyer needs to BUY NOW so bimbo realtor make her commission and car paryment!

    BUY NOW!! Don't listen to "R"! BUY, BUY, BUY!!!

    Bidding War going on,, Feeding Frenzy of Buyers, Buy now or never can buy again!!


    R wrote on October 10, 2008 04:48 PM: There will be another 20 to 50% fall from current prices as fewer and fewer people come to Vegas to work and or play.

    1800 sqft. home should and will cost 120 thousand not 250.

    If you have money, hold on to it.


    BUY,, BUY NOW!! wrote on October 10, 2008 04:25 PM: It's me again,, your neighborhood Realtor bimbo.

    I say buy, buy, buy,, buy now before prices get lower.

    Buy at higher price and you have more expensive house than neighbor who buys in a few months.

    You can brag that you have a more expensive house.

    Buy, and buy now. (To all other realtor bimbos- - STAY AWAY FROM MY BUYER!! I no share my commission with you!! Buyer is mine!!)


    2zero wrote on October 10, 2008 01:05 PM: That is not a hemorrhoid; it is Sig Rogich.


    Homeowner wrote on October 10, 2008 12:58 PM: My opinion is pay attention to who you are getting your real estate information from. Just years ago agents and their brocker cronnies were telling people to buy now, while you still can. They were on TV saying how there was no housing bubble, the market was going great in order to convince people to buy. Las Vegans trusted these fools only to be fooled into buying homes they could not afford. Watch out for the sharks trying to steal your money.
    While the Mayor and former UNLV president was trying to convince the government to expand our business economy into something other than gambling and construction, the greedy goblins just turned their back and pocketed as much money as they could for themselves. They were only interested in self.


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