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twitterReport: Number of past-due mortgages likely to increase
While numbers are improving nationwide, report shows more pain for Nevada
Steve Marcus / File photo
Nevada led the nation in mortgage delinquency in the second quarter of the year, according to a report released Monday. Increasing unemployment rates and falling home values, such as in this Henderson neighborhood, have put a pinch on Nevadans.
Monday, Aug. 17, 2009 | 2:51 p.m.
Nevada's beleaguered residential real estate market is expected to deteriorate through the end of the year, a national credit-rating agency forecast Monday.
TransUnion.com said Nevada led the nation's mortgage borrower delinquency list in the second quarter with 13.8 percent of such loans past-due. That is up from 11.61 percent in the first quarter.
For the second quarter, Nevada was again ahead of No. 2 Florida (12.3 percent) -- and that trend is likely to continue.
"Nevada has now eclipsed Florida as the state anticipated to experience the highest mortgage delinquency rate by the end of 2009, reaching as high as 16 percent," the Chicago company said as it released data for the second quarter and a forecast for the rest of the year.
Hit hard since 2007 by the subprime mortgage meltdown as homeowners were unable to make higher payments when interest rates reset higher, Nevada is also suffering from soaring unemployment driven by the national recession.
The unemployment rate hit 12.3 percent in June in the Las Vegas area as the economic downturn sharply reduced visitation to Las Vegas casino resorts -- and curtailed residential and commercial construction.
In the second quarter, mortgage loan delinquency (the ratio of borrowers 60 or more days past due) increased nationwide for the 10th straight quarter, hitting an all-time national average high of 5.81 percent -- up from 5.22 percent in the first quarter.
Year-over-year, U.S. mortgage loan delinquency is up about 65 percent, from 3.53 percent in 2008's second quarter.
While the news for Nevada looks grim, the trend nationwide is improving, TransUnion said.
"In its first quarter analysis, TransUnion reported a potential positive sign in mortgage delinquency rate trends. For the first time since the recession began at the end of 2007, the quarter-to-quarter growth rate for national mortgage delinquency showed a decrease," FJ Guarrera, vice president of TransUnion's financial services division, said in a statement. "Now, with the release of second quarter results, we see even more deceleration in mortgage delinquency, an indication that the mortgage market is beginning to stabilize.
"There are several complementary economic statistics at the national level to support this guarded optimism, such as the increase in consumer confidence in the second quarter. As for the labor market, although unemployment had continued to rise through the second quarter, July figures for unemployment insurance were lower than expected. Furthermore, recent figures from the government show the unemployment rate actually dipping to 9.4 percent nationally in July. These encouraging economic signs, coupled with a decrease in the rate of mortgage delinquency growth, suggest that we may have seen the worst of the recession. This is particularly noteworthy, in that delinquency statistics are generally lagging indicators of the economic environment," Guarrera said.
Monday's report follows these reports last week:
--RealtyTrac of Irvine, Calif., said that for the 31st consecutive month, Nevada had the nation's highest foreclosure rate in July, with one in every 56 housing units receiving a foreclosure filing in July -- more than six times the national average.
--Zillow.com of Seattle said Las Vegas was the third worst-performing residential real estate market in the second quarter, with home prices down 34.6 percent year-over-year, falling to a median of $140,500. And 82.5 percent of Las Vegas home mortgages had negative equity, the company said.
--The Greater Las Vegas Association of Realtors said July home sales remained strong because of foreclosure-driven lower prices. The Realtors said July's median price of existing single-family homes in Las Vegas was $138,800, down 0.9 percent from June; while the median price of condominiums and townhomes was $67,000, up 1.5 percent.
Discussion: 26 comments so far…
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Could you please ask these experts what the color of the sky is or what salt tastes like? I have been wondering about these perplexing puzzles as well.
Comment removed by staff.
wait until city center opens and all those construction workers leave town and all the landlords won't be able to cover the mortgage.
Not just homeowners who can no longer make their mortgage payments because of loss of a job or because of a mrtgage rate reset, how about those homeowners who choose to walk away from a home because they are so far upside down that it will be unlikely that they'll ever break even.
It may be time for Strategic Default. Prepare to abandon your house.
if you look at how many homes that have been sold in the last 4 or 5 months and prices are still not going up...how many DO we have to sell to get enough inventory knocked out to get those prices moving again?
Sure glad the recession is over. Thank goodness Obama and Reid solved the economic problems. What would we do without them?
Comment removed by staff.
neiman1: NOBODY would have solved the economic problems by this time. Get realistic. And I don't hear any Republican leaders coming to the charge with clear-cut alternative plans. They could just as easily start pushing their legislative ideas through.
@ Teaser
I agree no President could have solved the economic problems by now. However, Obama should have held his tongue when he promised he would and when he said he did (about a week ago).
"[Republicans] could just as easily start pushing their legislative ideas through."
Really? Republican leaders have no say in Congress when it comes to economic strife or health care because these two issues are very polarizing and force each politician to retreat to home base. Reid and Pelosi have used their power to not reach accross the table because they know they don't have to. I probably would do the same thing. Bipartisan debate is not fun. Yelling, arguments, research, and listening to other points of view. Healthy debate is just too hard.
all the republicans know how to do is put us in the fix we're in; they're great at creating problems but don't have a clue how to fix them.
I wasn't aware all the wall street bankers and morons who bought homes they could not afford were all republicans.
Deregulation does not create problems. People who broke securities laws and purchased above their heads are to blame.
Deregulation : Economic Recession :: Guns:kill people
and John Ensign does noth\ing but sexual deviance.
Time to fire the repblicans
Deregulation + Lax Enforcement = Economic Recession
"stratigic default-prepare to abandon your house"
I like that ! unfortunatley this may be the only option for the smart ones . why throw bad $ after bad. It may take 20 years or more to get back to even.
Is vegas turning into a Mad max movie
www.vegasbubble.com
That photo reminds me of the game concentration. You can match exact duplicate houses. I think people should get baked and look at the photo like "do I want to spend the next 30 years working just to live here?"
Strategic default, makes a lot of sense, what would you rather have another $12k in cash, or a house that is $100k upside down? By the time the market rebounds the bad credit will be gone. (5 to 7 years)
There are many people who walked away from their upside down house after purchasing a cheaper one. What happens to these people if the banks or collection agencies come after them? They end up trying to sell their new house. The times have changed and with there being a lot of money to be made it is naive to think the bank will just forgive the debt. The vultures will be flying in from all over.
I wonder how many of those "investors" bought houses with money they borrowed. Many paid cash but did they get it mortgaging their own house or business? If the economy does not improve soon, these people may be forced to put the houses back on the market. Especially after their stream of evicted renters have trashed the place over and over.
I like the strategic default option as well. I tried to refinance but my bank wouldn't talk to me - because I was making my payments. So now I'm just going to stop paying and use the money to buy a truck with a trailer hitch - if they won't negotiate with me, I'll pack up and drive away. The bank will lose more money than I will.
If you bought in Vegas because you live in Vegas and planned to remain in Vegas and still have the means to pay your bills, what's the problem? If you've got a common 30 year mortgage your rates and payments stay the same. In 25+- years, when you've satisfied the loan, your house will have appreciated in value. You get to write off the mortgage interest for the next 30 years... that could equate to $20,000+ a year in tax free earnings for many people... in the 25% bracket, that's $5,000 a year benfit that a non borrower doesn't have, 150,000 over 30 years, more than the median price of a Vegas home. If values dont go up, take the $150,000 it's saved you and buy another.
Now we hear from the nit wit neiman. He conveniently left out the resonsible party for this recession, the Republican Party and in particular Bush and the great deregulator McCain who promised America the economy was in good shape. Neiman needs to be institutionalized.His rediculous rants are the signs of a delusional nut job.
@ homer
You might want to study the doctrine of Federalism and the inherent powers given to each branch of government.
The President does not have the power to make laws, deregulate, tax, spend, regualte commerce, or give tax breaks. Go back in history from 2000-2008 and show me when there was a vote where only the Republicans passed any law or tax break. Then come back and talk.
I've said this before but I'll say it again. This is not the fault of a single person or a single political party. It's a culmination of many, many years of nobody watching the gate or even paying attention to the gate. The lending institutions need to stop being so arrogant and greedy. Work with people currently in need and work with people BEFORE they are in need. Suck in their guts and eat a little humble pie. The American public is just asking to be met halfway.
Why pay when deadbeats can get their mortgage lowered or get out of it completely. Walk away and screw the mortgage companies if they will not lower a mortgage note to a guy who pays on time, but will lower a note to a deadbeat...
I love this chaos.
House prices won't return to their lofty levels in our lifetime (no matter what your age now.) Once a bubble bursts, prices almost always overcorrect to the downside. Five (5) more years minimum before housing in Vegas hits bottom.
And a mortgage is a business contract, nothing more. If it makes financial sense for your family, you have no moral or ethical obligation to continue with it. Do you think banks/realtors/mortgage brokers feel a moral or ethical obligation to you? HA!!