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Jul. 10, 2009
Copyright © Las Vegas Review-Journal

U.S. foreclosures down 11 percent according to index

By HUBBLE SMITH
LAS VEGAS REVIEW-JOURNAL

Maybe it’s the moratorium, maybe it’s the government bailout. Perhaps President Obama’s loan modification program is starting to take hold.

Whatever the reason, foreclosures declined to 205,301 in the second quarter, down 11 percent from the previous quarter, according to the U.S. Foreclosure Index from Sacramento, Calif.-based Foreclosures.com.

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    • Clark County’s numbers were less upbeat with foreclosures rising to 2,686 in June, compared with 2,397 in May, the online investment firm reported. That number was down from last June’s foreclosures when there were 2,867 foreclosures, the firm reported.

    Preforeclosure filings, which include notices of default and notices of foreclosure auction, dropped sharply to 5,443 from 8,107 in May. They’re up from 5,103 in the same month a year ago.

    For the first six months, Clark County foreclosures nearly doubled to 23,588 from 12,800 last year, while preforeclosures increased 34.8 percent to 47,467 from 30,922 a year ago.

    Nationally, preforeclosures fell 10 percent in the second quarter to 494,078, with the largest drop of 42 percent in the Midwest, the index showed.

    “These huge drops — double digits in many parts of the nation — are a sigh of relief for the economy and housing markets as they bump along toward recovery,” Foreclosures.com president Alexis McGee said.

    The real surprise, she said, was the 2 percent to 3 percent drop in both foreclosures and new filings this year compared with 2008.

    “This may not be a big drop, but the fact is 2009 has not seen a total increase in new filings as everyone has expected,” McGee said.

    Frank Nason of Residential Resources in Las Vegas said it’s a temporary lag. He’s seen industry reports vary from 10,000 to 20,000 real estate-owned homes that banks have been purposely keeping off the market.

    He doesn’t know if it’s by design or to stabilize the market or sheer inability to handle the volume.

    “I find the argument for a build-up in properties that must be released to the market more compelling that those who say otherwise,” Nason said.

    While the number of REOs has declined from 51 percent of all home listings in January to 39 percent in June, the number of short-sale listings increased from 38 percent to nearly 55 percent, according to Residential Resources. Of all closings in June, less than 9 percent were short sales.

    Nason said he finds this trend “quite disturbing” in light of the deteriorating job market and overall economic indicators. It means another 10,000 units will be entering foreclosure, many of them ultimately sitting vacant with no utilities. Some will get trashed by frustrated owners, he said.

    Timothy McFarlin, a loan modification attorney in California, said the 26 percent decrease in second-quarter REOs in California could be due to a new law there. It requires lenders to give the borrower 90 days to work out a foreclosure solution before filing a notice of default.

    “That wouldn’t account for changes in Nevada, of course, but possibly it’s throwing a wrench in the lenders’ systems and everyone gets extra time,” he said.

    McGee of Foreclosures.com warned that foreclosures are far from over. Capital-hungry banks will be pressed to unload their “phantom” inventory of REO homes, she said. For now, lenders with bulging REO portfolios are taking a wait-and-see approach to federal and state reforms.

    “Every foreclosure, after all, costs banks and lenders thousands and sometimes even tens of thousands of dollars,” she said.

    Las Vegas will get hit with another wave of foreclosures toward the end of the year as mortgages adjust to higher rates, said David Stone, president of Nevada Association Services. Lenders as well as homeowners associations must be willing to work with cash-strapped owners, he said.

     

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

     

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    Believe Not...... wrote on July 10, 2009 10:27 PM: RJ Distraction Hour with deception to boot...........believe not what your eyes read..


    Patrick wrote on July 10, 2009 04:59 PM: Here is a little story.

    Bought my house in Feb 2009. Listed at 240k and bought it for 225K. House during peak was probably in 500k range. When I made my offer my realator bless her heart indicated we wouldn't get it. I heard that good old phrase of multiple offers, multiple offers. Didn't get the house at first because there were bigger offers than mine. I was asked if I wanted to put more up and I said know. Two weeks later it comes back to me. I buy it. What happened to the other offers? In my 4 month buying experience I learned a couple things. People are bidding against each other on the same houses. They are listening to their trusted housing specialist who encourages them to offer more than the listing price. In some cases I seriously doubt that all multiple offers are serious offers. It is not hard to have someone out there making bullshit offers so the listing agent can now say there are multiple offers and you need to make your best offer.

    People need to stick to their guns and not pay more than list. If investors want to buy up house for renting, let them, because they are losing there shirts even more in the market because of the job situation.

    I agree there are plenty more homes out there ready to come on to the market.


    V wrote on July 10, 2009 03:59 PM: "Frank Nason of Residential Resources in Las Vegas said it’s a temporary lag. He’s seen industry reports vary from 10,000 to 20,000 real estate-owned homes that banks have been purposely keeping off the market."

    "For the first six months, Clark County foreclosures nearly doubled to 23,588 from 12,800 last year, while preforeclosures increased 34.8 percent to 47,467 from 30,922 a year ago."

    Over 71,000 foreclosures and preforclosures in the first half of 2009. And why are people bidding on properties and paying above asking price??




    Air Con wrote on July 10, 2009 03:02 PM: SCAM ALERT


    many big companies are wayy overcharging for their services and new untis


    a new unit with high efficiency can be bouthg t and installed from most reasonable companies for aboutr $1200


    why would you pay $350 for just a small fan motror or something when you can get the whole unit for $1200



    SCAMS---


    interest we pay to the federal reserve bank wrote on July 10, 2009 02:22 PM:












    HELEN WEILS wrote on July 10, 2009 02:20 PM: Maybe it’s the moratorium.
    DUH!!!

    FIRST WAVE, THE PEOPLE WITH BAD CREDIT.
    2ND WAVE, THE PEOPLE WHO BOUGHT AFTER
    2006 AND ARE UPSIDE DOWN 50%
    3RD WAVE, COMMERCIAL

    SAD BUT TRUE.

    ALTHOUGH, I MUST SAY THAT IN THE LAST WEEK I'VE SEEN A BIG PICKUP IN USA BUSINESSES LOOKING OR BUYING EQUIPMENT.
    FIRST 6 MONTHS. NOTHING, NADA. NOW, A
    VERY HEALTHY PACE. GUESS IT'S GOING TO BE THE SMALL BUSINESSES AND ENTREPRENEURS WHO PULL US OUT OF THIS.


    wcannon@yahoo.com wrote on July 10, 2009 01:29 PM: i am really wondering , of the arms due to reset thru 2011, how many of them are like mine? it's based on the 6 month libor rate plus 2.25%. if it were to reset today, my interest rate would go down 2%. its due to reset in may of 2011, and if it had reset anytime between when i got the loan and now, it would have always gone down. i guess no one knows what the future will bring, but if rates stay where they have been , i'm good. so how many have loans like mine?


    word games wrote on July 10, 2009 01:21 PM:




    Jim wrote on July 10, 2009 01:15 PM: If 70% of the homes are upside down, than by the time this crisis is over, 70% of the homes will change hands by foreclosure, short sale or whatever.

    Only once in US history has there been a time when homeowners paid on mortgage balances which were more than their home's value. That was a brief time during the Great Depression.

    Homeowners will not pay their mortgages if the balance over the long term if it is more than the home is worth. It is an economic no-brainer.


    Ken wrote on July 10, 2009 12:14 PM: The moratorium is the primary factor in this. Banks are just starting to kick foreclosures back into high gear.


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