Panel tackles Nevada’s home foreclosure crisis

Want to solve the foreclosure crisis in Nevada?

For starters, figure out who holds the actual mortgage notes on delinquent borrowers.

Then enforce state and federal regulations that would prevent the problem from reoccurring.

So said officials and analysts on Tuesday.

Problems determining who holds the actual mortgage note and enforcement of regulations are two reasons that loan modification and foreclosure mediation programs aren’t saving people from losing their homes, said David Jones, associate director of Lied Institute for Real Estate Studies at University of Nevada, Las Vegas.

“There are issues because we have banks that not only hold their own mortgages, but they sold off mortgages. It’s difficult for the homeowner to work with servicers and investors,” Jones said at a public forum sponsored by the Lied Institute.

Jones, who worked for Bank of America and several community banks before joining the UNLV faculty, wanted to know why lenders won’t “short-sell” a home back to qualifying owners who occupy the home instead of selling to investors.

Most homeowners in Las Vegas are so far “upside down” on their homes — owing significantly more than their home is worth — that they don’t qualify for the government’s $75 billion Home Affordable Mortgage Plan.

They’ve asked banks to write down principal mortgage to current values, but only 4.5 percent of those who qualify for the program saw a reduction in principal nationwide, and that figure falls to 1.8 percent in Las Vegas, said Nasser Daneshvary, director of the Lied Institute.

People are worried about short-sale deficiency judgments in which the first-mortgage noteholder has six months to file for judgment and junior lienholders have six years to file.

Mike Clauretie of UNLV’s Department of Finance suggested that banks waive the deficiency judgment and write down principal mortgage balances with an agreement that the forgiven share of the loan can be sold off to investors, who would share profits from any future appreciation in the home’s value.

That’s a possibility when the note is being held and serviced by the same lender, said Joel Sarmiento, senior vice president for Wells Fargo Home Mortgage in Tucson, Ariz. The problem is that 80 percent of loans serviced by Wells Fargo are owned by someone else, predominantly Fannie Mae, Freddie Mac and Ginnie Mae.

“That’s a different ballgame. When we own the property, we can do a lot of different things, but when it comes to investors, we don’t have the ability to make those decisions,” Sarmiento said.

The Home Affordable Mortgage Plan didn’t work in Las Vegas because of the city’s unique housing situation, said Barbara Buckley, former state Assembly speaker who authored the law in the 2009 Legislature that created the foreclosure mediation program.

People who paid $400,000 for a home that’s now worth $130,000 either need a principal mortgage reduction or they’re going to make a financial decision to walk away, she said.

“So the first thing we need is more effective government programs specific to Las Vegas,” Buckley said. “We’re seeing that with the hardest-hit funds. I think the state would be better than the federal government to deal with this.”

Buckley praised Attorney General Catherine Cortez Masto for filing a lawsuit against Bank of America over allegations that homeowners were given promises of loan modifications that were not kept.

Bank of America canceled sending a representative to the panel discussion.

There are so many variables to the foreclosure crisis that have created more questions than answers, said Michael Wixom, an attorney specializing in commercial real estate and finance.

Federal regulators have strict loan-to-value requirements for lenders, he noted. On the commercial side, if the loan-to-value doesn’t match the appraisal, the bank has to write that loan down.

“We were getting 120 percent loan-to-value when people were buying houses. How did that happen? We need to know that before we can understand the problem ,” Wixom said.

Daneshvary of Lied Institute calculated a negative spillover effect of 20 percent to 30 percent decline in value for nondefault homes in neighborhoods with high concentrations of foreclosures.

The tipping point takes place at about 40 foreclosed homes in a neighborhood, he said. That’s when homes not in foreclosure sell for about the same as those in foreclosure. Daneshvary found the losses to be about $78,000 on a $292,000 home in a sample neighborhood with 19 homes in foreclosure, factoring in an average time trend discount of 14.8 percent. A total of $366 million is lost on nondefault home values in one year.

Contact reporter Hubble Smith at or 702-383-0491.

Caesars Forum Meeting Center
Caesars broke ground Monday on its $375 million Caesars Forum Meeting Center (convention center) just east of the High Roller observation wheel. (Caesars Entertainment)
Technology reshapes the pawn shop industry
Devin Battersby attaches a black-colored device to the back of her iPhone and snaps several of the inside and outside of a Louis Vuitton wallet. The device, installed with artificial intelligence capabilities, analyzes the images using a patented microscopic technology. Within a few minutes, Battersby receives an answer on her app. The designer item is authentic.
Recreational marijuana has been legal in Nevada for one year
Exhale Nevada CEO Pete Findley talks about the one year anniversary of the legalization of recreational marijuana in Nevada. (K.M. Cannon/Las Vegas Review-Journal)
Young adults aren't saving for retirement
Financial advisors talk about saving trends among young adults. (Bailey Schulz/Las Vegas Review-Journal)
President Trump’s tariffs could raise costs for real estate developers, analysts say
President Donald Trump made his fortune in real estate, but by slapping tariffs on imports from close allies, developers in Las Vegas and other cities could get hit hard.
Las Vegas business and tariffs
Barry Yost, co-owner of Precision Tube Laser, LLC, places a metal pipe into the TruLaser Tube 5000 laser cutting machine on Wednesday, June 20, 2018, in Las Vegas. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Nevada Film Office Connects Businesses To Producers
The director of the Nevada Film Office discusses its revamped locations database and how it will affect local businesses. (Bailey Schulz/Las Vegas Review-Journal)
Opendoor isn't the typical house flipping company
Unlike most house flippers, the company aims to make money from transaction costs rather than from selling homes for more than their purchase price.
The Venetian gondoliers sing Italian songs
Gondolier Marciano sings a the classic Italian song "Volare" as he leads guests through the canals of The Venetian in Las Vegas. (K.M. Cannon/Las Vegas Review-Journal)
Building In Logandale
Texas homebuilder D.R. Horton bought 43 lots in rural Logandale. (Eli Segall/Las Vegas Review-Journal)
Indoor farming in Southern Nevada
Experts discuss Nevada's indoor farming industry. (Bailey Schulz/Las Vegas Review-Journal)
Former Fontainebleau could have become a Waldorf Astoria
Months after developer Steve Witkoff bought the Fontainebleau last summer, he unveiled plans to turn the mothballed hotel into a Marriott-managed resort called The Drew. But if Richard “Boz” Bosworth’s plans didn’t fall through, the north Las Vegas Strip tower could have become a Waldorf Astoria with several floors of timeshare units. (Eli Segall/Las Vegas Review-Journal)
LVCVA CEO Rossi Ralenkotter announces plans to retire
Rossi Ralenkotter, CEO of the LVCVA, on Tuesday confirmed a Las Vegas Review-Journal report that he is preparing to retire. Richard N. Velotta/ Las Vegas Review-Journal
Cousins Maine Lobster to open inside 2 Las Vegas Smith’s stores
Cousins Maine Lobster food truck company will open inside Las Vegas’ two newest Smith’s at Skye Canyon Park Drive and U.S. Highway 95, and at Warm Springs Road and Durango Drive. Cousins currently sells outside some Las Vegas Smith’s stores and at Fremont Street and Las Vegas Boulevard. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas home prices to continue to rise, expert says
Lawrence Yun, chief economist at the National Association of Realtors, gives homebuyers a pulse on the Las Vegas housing market. (Eli Segall/Las Vegas Review-Journal)
NV Energy announces clean energy investment
The company is planning to add six solar projects in Nevada, along with the state's first major battery energy storage capacity. Bailey Schulz/Las Vegas Review-Journal
3 Mario Batali restaurants on Las Vegas Strip to close
Days after new sexual misconduct allegations were made against celebrity chef Mario Batali, his company announced Friday that it will close its three Las Vegas restaurants July 27. Employees of Carnevino Italian Steakhouse, B&B Ristorante and Otto Enoteca e Pizzeria, all located in The Venetian and Palazzo resorts, were informed of the decision Friday morning. Bastianich is scheduled to visit the restaurants Friday to speak to employees about the next two months of operation as well as how the company plans to help them transition to new positions.
Nevada has its first cybersecurity apprenticeship program
The Learning Center education company in Las Vegas has launched the first apprenticeship program for cybersecurity in Nevada. It was approved by the State Apprenticeship Council on May 15. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas union members voting to authorize the right to strike
Thousands of Las Vegas union members voting Tuesday morning to authorize the right to strike. A “yes” vote would give the union negotiating committee the power to call a strike anytime after June 1 at the resorts that fail to reach an agreement. (Todd Prince/Las Vegas Review-Journal)
Small businesses struggle to find qualified candidates
A 2018 survey found that over two-thirds of small businesses in Nevada find it somewhat to very difficult to recruit qualified candidates. Bailey Schulz/Las Vegas Review-Journal
Nevada secretary of state website offers little protection against fraudulent business filings
Property developer Andy Pham tells how control of his business was easily seized by another person using the secretary of state website.
Caesars may be going solo in its marijuana policy
Several Southern Nevada casino companies aren’t following Caesars Entertainment’s lead on marijuana testing.
How much is the Lucky Dragon worth?
Less than a year-and-a-half after it opened, the Lucky Dragon was in bankruptcy.
Gyms and discount stores take over empty retail spaces
Grocery stores used to draw people to shopping centers. But many large retail spaces have been vacant since 2008. Discount stores like goodwill and gyms like EOS Fitness are filling those empty spaces, and helping to draw shoppers back in. K.M. Cannon/Las Vegas Review-Journal
Funding source of Las Vegas stadium for the Raiders is sound, expert says
The stadium is funded in part by $750 million of room taxes, the biggest such tax subsidy ever for a professional sports stadium. Robert Lang, executive director of Brookings Mountain West and The Lincy Institute at UNLV, says that is a good use of public funds. (Richard Velotta/Las Vegas Review-Journal)
Las Vegas needs light rail, expert says
Robert Lang, executive director of Brookings Mountain West and the Lincy Institute said he is afraid of a "congestion mobility crisis." Las Vegas needs a light rail system, he said, to accommodate the city's growing number of attractions. (Richard Velotta/Las Vegas Review-Journal)
Three takeaways from Wynn Resorts' Earnings Call
Matt Maddox came out swinging in his first earnings conference call as Wynn Resorts chief executive officer, boasting of record Las Vegas quarterly revenues and applicants lining up for work.
Star Wars VR Comes to Las Vegas
Sneak peak at the new "Star Wars: Secrets of the Empire" VR experience at the Grand Canal Shoppes.
Elaine Wynn continues her fight to change Wynn Resorts board
Elaine Wynn, the largest shareholder of Wynn Resorts Ltd., is seeking to kick a friend of her ex-husband Steve Wynn off the company’s board of directors. (Todd Prince/Las Vegas Review-Journal)
Zillow is getting into house flipping in Las Vegas
Las Vegas Review-Journal real estate reporter Eli Segall says flipping houses has waned in popularity after the housing bubble burst.
News Headlines
Add Event
Home Front Page Footer Listing
You May Like

You May Like