Q: President Barrack Obama announced that Nevada will get about $100 million to help homeowners. What do you think this will do for people here in Las Vegas who are worried about losing their homes to foreclosure? — Matt D., Las Vegas
A: This recent announcement was welcome news for those of us in the local real estate industry and for homeowners throughout Nevada.
During President Barrack Obama’s Feb. 19 visit to Las Vegas, he and Sen. Harry Reid (D-Nev.) announced that at least $100 million in federal funds will soon be funneled into Nevada to help homeowners who are facing foreclosure — and even some who are underwater owning more than their homes are worth.
Based on their remarks and subsequent information, it seems as if this money won’t be available to local homeowners until June.
Still, my fellow members of the Greater Las Vegas Association of Realtors and I generally welcome this assistance. As I said at the time, it can only help.
That’s not to say that $100 million in federal funds for the entire state of Nevada is going to solve our foreclosure problems and completely heal our housing market.
Consider that local housing analysts estimate that we’ll see about 24,000 homes in Southern Nevada alone fall into foreclosure in 2010. Given such statistics, it’s clear that this federal money won’t come close to solving the problems were facing.
Depending on how it’s put to use, it should help hundreds of local homeowners.
This kind of assistance also confirms that the federal government is paying attention to the challenges we’re facing here in Nevada, especially in the Las Vegas area, where we continue to have the highest foreclosure rate among all U.S. metro areas.
Government officials have indicated that these funds will be administered locally by the Nevada Housing Division. Beyond that, we still don’t know all the details of how this money will be utilized.
Based on Sen. Reid’s initial statements and local news reports, the roughly $100 million will reportedly be used for things like bridge loans, providing incentives for lenders to modify home loans and to help people who have lost their jobs and are now in danger of losing their homes.
It may also help underwater borrowers who owe more money than their homes are now worth and help homeowners struggling to pay second mortgages.
In any case, this help for homeowners comes as we’re seeing signs that our local foreclosure rate may be easing a bit.
GLVAR statistics show that the number of local home sales involving bank-owned properties has been declining in recent months. At the same time, the number of local homes being sold in short sales is increasing at a nearly corresponding rate.
Local Realtors are reporting that lenders are being more responsive and more willing to work out short sales — which occur when a lender agrees to sell a home for less than the borrower owes on the mortgage.
To me, this makes good sense since most people would agree that short sales are a better option for everyone involved than going through the foreclosure process.
The bottom line is we’ll have to wait and see how much help these federal funds provide.
Rick Shelton is the president of the Greater Las Vegas Association of Realtors and has worked in the real estate industry for 20 years. GLVAR has 13,500 members. To ask him a question, e-mail him at email@example.com. For more information, visit lasvegasrealtor.com. Questions may be edited for space and clarity.