Realtors address foreclosure issues

Q: I'm interested in your thoughts about what real estate professionals can and should be doing about the problems we're having with foreclosures.

-- Sean F, Las Vegas

A: The timing is good to shed some light on this issue.

First, as I mentioned in a recent column on a related topic, the Greater Las Vegas Association of Realtors recognizes what a significant issue this has become, especially here in Nevada, where we have one of the highest foreclosure rates in the nation.

Homes owned by lenders are dominating the local housing market, accounting for about 80 percent of all existing homes sold here. They are also driving down home prices, which are now similar to what we saw in 2001.

To deal with this situation, the GLVAR created an Real Estate-Owned Work Group. We've enlisted the help of the top REO agents in town to create and distribute a brochure and other materials on these subjects. We plan to have this information available soon for the public. For now, our goal is to better educate GLVAR members, who can then share this knowledge with home buyers and sellers.

In addition, the Nevada Association of Realtors just released a report based on a statewide survey it conducted on the foreclosure crisis and its impacts here in Nevada. It's called "The Face of Foreclosure."

The findings were interesting and sometimes surprising.

The report shows that all types of people are being impacted by foreclosures, from folks who previously had a high income, to people on fixed incomes, to renters who found out with only a few days notice that their landlord let their home fall into foreclosure and never notified them.

It's easy to assume that most homeowners in this situation bought more home than they could afford during peak periods in the housing market and should have known they'd never be able to pay their mortgage.

Indeed, the NVAR survey shows that "many people take responsibility for getting into loans and homes they simply could not afford and had no business having."

But the report also suggests it's more complicated than that. For most of those surveyed, a "sea-changing life event" contributed to their foreclosure. These experiences range from a serious illness and large medical bills, to a loss of a job, to loss of a spouse, to divorce.

Many others admitted they didn't understand their loan or the home-buying process and didn't know what options they may have had when they fell behind in their payments.

Back to my point about education being a key to addressing this problem, the report found that homeowners who worked with a Realtor when they bought their home were nearly 10 percent less likely to have their home fall into foreclosure. Likewise, homeowners who worked with a Realtor were more likely to know what type of loan they have on their home.

NVAR President Devin Reiss said the survey polled 500 Nevadans who were considered likely to be impacted by foreclosure, including 60 percent who had experienced a foreclosure and 24 percent who had a close relationship with someone who had.

As a member of NVAR, I'm glad we put the time and effort into doing this, especially since there appears to be a lack of local data on this important issue.

The report includes recommendations on how we can all work together to address this issue. These include developing tools that Realtors and others can use to identify, educate and help "healthy homeowners" who are less likely to lose their homes.

The report recommends that "Realtors identify buyers that many may be disregarding in the current market, including those who may have been through foreclosure."

It suggests that these measures will "not only help Realtors sell homes but, by getting people into the right homes, it will help to stabilize the market and even re-establish areas and neighborhoods, thereby solidifying property values and reintroducing homeownership into the Nevada economy." I'd say that's an admirable goal.

You can find a free copy of the NVAR report at nvar.org.

Sue Naumann is the president of GLVAR and has worked in the real estate industry for nearly 30 years. The trade group has nearly 14,000 members. To ask her a question, e-mail her at ask@glvar.org. For more information, visit lasvegasrealtor.com.