Saturday, September 09, 2006

Las Vegas Foreclosures

Las Vegas Foreclosures - Who is at Risk?

Currently, investors might be the most at risk for being upside-down in their homes because of the slowing appreciation rate, surmises Mike Fratantoni, the senior economist for the Mortgage Bankers Association.

"Nationally, the foreclosure rate is 0.99 percent, but in Nevada it is 0.32, which is in line with very strong job growth and housing growth in Nevada."

While Nevada’s foreclosure rate may be below the national average, it is still up considerably over previous years.

2005 First Quarter
January - 1056
February - 1007
March - 1126
April - 920

2006 First Quarter
January - 1201
February - 1429March - 1529
April - 1266

In July, Nevada had the second-highest foreclosure rate in the nation after Colorado for the second straight month, with 1,626 properties entering some stage of foreclosure, a 31 percent increase from the previous month. Nationwide, foreclosures were up 5 percent in July from the previous month and 18 percent from a year ago, RealtyTrac reported.

And the reason many Las Vegas homebuyers face foreclosure isn't the result of an unforeseen tragedy. Most are people who experienced excessive amounts of appreciation in their homes in recent years. They took out equity lines or refinanced their original loans to pay for luxury items, and are now having problems making the payments on adjustable loans whose interest rates have risen considerably.

About 30 percent to 40 percent of the people who get behind in their payments never even
contact their lender. Many times they don’t think the lender can do anything for them, and they feel too overwhelmed to save their homes. Often there is still plenty of room to negotiate with the lender, but the homeowner doesn‘t realize that this type of negotiation is an option. With good documentation from the borrower, the lender may be able to arrange a repayment plan based on the current financial situation, and may even provide for a temporary reduction or suspension of payments.

The borrower may also be able to arrange a short sale of the property, where the lender is willing to take less than the amount owed against the mortgage rather than have to take the property back through foreclosure. Or as a last resort, the borrower may be able to arrange to “give” the house back to the lender by a deed in lieu of foreclosure. While this won’t save the house, at least it is less damaging to the borrower’s credit than a full foreclosure would be.

To learn more about foreclosure proceedings or to inquire about the possibility of purchasing a home in preforeclosure, please contact us and we will be happy to provide you with information and listings.

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