Same story, different month.
Nevada posted one of the highest foreclosure rates in the nation in January even as default activity declined across the state, according to a Wednesday report from California research firm RealtyTrac.
The Silver State ranked No. 2 for foreclosure filings in January, with one in every 533 housing units in some stage of the process, the report said. That’s twice the national rate of one in every 1,058 homes.
Still, Nevada’s foreclosure rate was down 35 percent when compared with January 2013. Foreclosures dropped 17.5 percent nationally.
Only Florida, with a foreclosure rate of one in every 346 homes, ranked ahead of Nevada. Rounding out the top five were Maryland, Illinois and New Jersey.
Nevada’s foreclosure figures have been volatile since 2011, when the first in a series of state laws affecting the foreclosure process took effect. Most recently, the state’s Homeowner’s Bill of Rights became law Oct. 1, requiring among other measures that banks notify homeowners 30 days before starting foreclosure, and assign a single contact person to a household’s case.
RealtyTrac reported 284 foreclosure starts statewide in January, down 84.5 percent from a year earlier. Banks completed foreclosures on 543 properties in Nevada, down 80 percent compared with January 2013.
Nationally, foreclosure starts fell 11.6 percent, while foreclosure completions dipped 40.1 percent.
Dennis Smith, president and CEO of Home Builders Research in Las Vegas, said foreclosure starts remain well below the 3,000 to 3,500 monthly filings the state averaged in the months before legislators began changing default laws in 2011. At the current pace, it could be 2018 before the market clears its potential foreclosure inventories, he said.
Smith said he doesn’t expect any significant pickups in foreclosure filings at least through June, although he added that some key factors could affect the rate in the near term.
For starters, there’s little congressional appetite for renewing the federal Mortgage Forgiveness Debt Relief Act, which expired in December. The law suspended income-tax liability on the difference between how much a borrower owes and how much the bank writes off in a short sale. Now that forgiven mortgage debt in a short sale counts as taxable income, it’s possible foreclosures and bankruptcies will jump as homeowners can’t afford the tax hit, Smith said.
Also, sluggish job growth and a local jobless rate stalled in the vicinity of 9 percent could mean a steady, sustained stream of distress sales, Smith said.
Contact reporter Jennifer Robison at firstname.lastname@example.org. Follow @J_Robison1 on Twitter.