Nevada housing market still suffering


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.

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
AreaYear-end 2008Sept. 2008
Nevada17.7%14.1%
Nation11.9%10.3%
California13.3%10.9%
Arizona14.1%11.3%
Source: Mortgage Bankers Association