With 3,485 foreclosure filings in the second quarter, or one out of every 200 households, Las Vegas ranks 18th among the largest 100 U.S. metropolitan statistical areas, between Chicago and Cleveland, a California-based Web site reported.
Total foreclosures in Las Vegas decreased 30 percent from the first quarter, according to RealtyTrac, an online marketplace for foreclosure properties.
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"The majority of metros we track, along with the nation as a whole, reported fewer foreclosures compared to the previous quarter," RealtyTrac Chief Executive Officer James Saccacio said.
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 in July, a 31 percent increase from the previous month.
Timothy McCoy of Keller Williams Realty in Las Vegas said he's seeing more homes on the Multiple Listing Service that require court approval for a sale, which means it could be a foreclosure or it could be a civil matter such as divorce or probate. The increase is due largely to the types of loans people obtained over the last few years, he said.
"A lot of adjustable-rate mortgages ... they have low (interest) rates, but when the three years or five years are up, some people could see a 30 percent increase in their house payments," McCoy said. "They know it's coming, but they're not always prepared for it."
Indianapolis, with one foreclosure for every 101 households, had the highest rate in the nation, RealtyTraq's market report showed, followed by Atlanta and Dallas.
Another Web site, BankHomesDirect, showed 11,499 listings in Clark County, including 1,402 bank-owned properties, 4,602 preforeclosure properties and 1,402 auction properties.
Before a home goes into foreclosure, owners are given a notice of default with a certain number of days, usually 45, to pay arrearage, McCoy said.
"This is a small window of opportunity for the homeowner to solve his problem," he said. "Maybe an investor or real estate agent goes to the house and says, 'I can help you save the house or save your credit.' Sometimes it requires selling the home at a discount."
McCoy said more "short sales" are showing up on the MLS in which the lending institution is willing to sell a home for less than the loan amount.
"The market has changed so much that they can no longer take a home in foreclosure and sell it for top dollar," he said.
Nationwide, foreclosures were up 5 percent in July from the previous month and 18 percent from a year ago, RealtyTrac reported. After dropping to their lowest level of the year in June, U.S. foreclosure filings rose above 90,000 again in July and are up 39 percent for the year.
Nevada's neighbors are also struggling. Home foreclosures are rising in Arizona, with 8,321 filings in the first two quarters. In California, lenders sent default notices to 20,752 homeowners between April and June, a 67 percent increase from the same period a year ago.
"It will be very interesting to see where the market goes over the balance of the year as billions of dollars of adjustable rate mortgages reset at significantly higher rates," Saccacio said.
Dale Puhl, president of Southwest Title, said he's sending out a few notices of default on home loans, but really hasn't seen many go to foreclosure.
"We know what the trends are in the industry, all those ARMs that start at 4 percent and are now at 7 percent and 8 percent," Puhl said. "We realize what's happened with zero interest. Some of those situations are going to result in foreclosure because large increases in appreciation have stopped and equity has disappeared. Either they have negative amortization on the loan or interest rates are so high, they can't handle the payments."
The foreclosure market in Las Vegas is a little tighter than it was earlier this year, Paul Lemus of Don P. Properties said.
"There's not as many foreclosure deals with equity in them because a lot of people borrowed against their home and now have a larger loan-to-value ratio," he said.
