Las Vegas Sun

September 2, 2014

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Letter to the editor:

Force lenders to release homes

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My husband and I have been offered career opportunities in Nevada. We spent weeks looking for housing. We found nothing. Look on any real estate site and you’ll see thousands of homes for sale in Nevada.

When you try to see the homes, it seems like 99 percent are unavailable because of the lenders. Most are vacant, and they cause a blight in every neighborhood.

When a home is in foreclosure, no one is paying the real estate taxes — millions of dollars are owed to Nevada and could remain unpaid indefinitely.

Thousands of homes have sat in foreclosure for years and will continue to sit unless your Legislature acts to force lenders to release homes. The lenders now let a fraction on the market.

The Legislature can establish reasonable guidelines for the foreclosure process and force lenders to release homes so that they can generate tax revenue.

I realize this may cause prices to drop at first, but it would generate income for the state in unpaid taxes and also bring people like us to Nevada.

In the long run, it would raise prices and help neighborhoods — the vacant homes would be purchased and cleaned up, and the value of the entire area would increase.

State officials should open Nevada for business again.

“Home means Nevada” to us, as well.

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  1. Letter writer is correct. The lengthy time to process home foreclosures in Las Vegas is causing demand for houses to exceed supply. Especially with the slow down in new home construction, which by the way is picking up [likely due to the shortage]. The successful home buyers in Las Vegas are paying cash for the homes and bidding up the homes' asking prices. The reason home prices [new and old] are on the rise, not just in Las Vegas but cities across the nation.

    Carmine D

  2. Why should lenders be told by the government what to do with their assets? If the bank feels that the foreclosed home is increasing in value time passes, it is only prudent for them to wait to release the home on the market.
    There are houses on the market that can be traditionally purchased that are still great values.

  3. John said: Why should lenders be told by the government what to do with their assets? If the bank feels that the foreclosed home is increasing in value time passes, it is only prudent for them to wait to release the home on the market.

    Easy one John Dough - the banks are again manipulating the market. Manipulation by any monopoly is not allowed, even under our capitalist system. The banks have a monopoly at this point - of vacant homes that need to be available for sale.

  4. There was a segment on a news show the other day where the conversation was about this. They commented that in many cases the banks have not even foreclosed on the vacant homes. One reason for this is that it leaves the mortgage borrower still liable for the property taxes. It was said that in some instances people had been found that they owed thousands in property taxes on a house they had abandoned years early. They also commented that as long as they do not foreclose and sell the home, the banks can still list them on their books at the loan value. This keeps the bank's balance sheets looking better than they probably should.

    And while holding onto the homes is likely a good strategy if you are expecting prices to rise, this does not work well if you are not keeping up the property. Most any vacant house without utilities on and some minimal upkeep will deteriorate. So, you have to expect some significant rise in prices to offset that loss in value. But given that the Case-Shiller index for Las Vegas has gone from 89.89 in February of 2012 to 105.70 in February of 2013 (roughly the August 2009 level), maybe they will start moving some inventory along.

  5. The main reason for the increase in the construction and sale of new homes, is because the people who are buying them cannot compete with others with billions in cash who are buying up all the foreclosures.

    We are in a catch 22 situation. If the banks release a large bunch of foreclosed homes all at once to the buying public,then brand new home sales fall.Which is the best way to go on this is anyone's guess.

  6. "Thousands of homes have sat in foreclosure for years and will continue to sit unless your Legislature acts to force lenders to release homes. . .The Legislature can establish reasonable guidelines for the foreclosure process and force lenders to release homes so that they can generate tax revenue."

    Butler -- you're ignoring the basic clause in both our federal and state Constitutions forbidding any law impairing the obligations of contracts. Since most (if not all) foreclosures involve contracts and obligations, your suggestion fizzles. Our Congress and state legislatures pass way too many unConstitutional laws already. And because most foreclosures involve interstate commerce, that would be mostly up to Congress.

    "Letter writer is correct."

    CarmineD -- as you can see from the above, she's not. The correct thing for Congress to do is put teeth into laws like Title 12's RESPA to respect and enhance the centuries-old law of notes. As it is they bury it with new schemes mostly favoring the pretend-lenders, since they're the only ones who can afford being on the east coast influencing the best Congress money can buy.

    "Why should lenders be told by the government what to do with their assets?"

    vegasbike -- because most of those lenders are federally chartered. That means they're controlled by the laws which created them.

    "Easy one John Dough -"

    Judy -- good one about the monopoly. A bit over a century ago Teddy Roosevelt won the White House based on a promise to bust up monopolies like Rockefeller's Standard Oil.

    "They also commented that as long as they do not foreclose and sell the home, the banks can still list them on their books at the loan value. This keeps the bank's balance sheets looking better than they probably should."

    floozy -- another good point. And it highlights how homeowners keep on getting screwed for buying into the traditional American dream.

    "The regulators got bailed out, the middle class lose their jobs and their houses. All this desire to trust in the government to make sure that big corporations won't hurt them actually is a backfire on them." -- Rep. Ron Paul to Jon Stewart 9/26/11, citing the example of the real estate crash as example of government regulation gone bad

  7. Future: Ref your 1:40 p.m. No. It was a Republican't government that coaxed us "... into the sub-prime recession with low interest no moneny down loans securitized by Fannie and Freddie " The current government is a Democratic one that is showing few signs of wanting to "... tell us what to do in the housing market "

  8. Lenders don't lose money when houses are underwater or foreclosed. They have insurance that makes up the difference between the selling price and the mortgage amount. In recent cases, the borrowers are required to have this insurance to qualify for the home loans. Lender gets the benefits and the borrowers have to pay it.

    Carmine D

  9. "CarmineD -- as you can see from the above, she's not. "

    Actually she is [right] and that's how and what I see.

    Carmine D

  10. BTW, the demand for homes is up 25 percent and the availability of homes is up only 17 percent. That difference, 8 percent, if we can believe economics 101, accounts for the higher home prices and rise in new home starts.

    Carmine D

  11. BTW, I have said this before and will here again. I fully expect Congress and the President to pass a principal reduction law for mortgaged homeowners this year. Perhaps even as early as summer.

    Carmine D

  12. "Wow! Wow! Wow!

    Unbelievable....simply unbelievable!

    Future and Carmine disagreeing on what should happen with all the foreclosed homes in the Las Vegas area."

    El Lobo:

    Might just as well add Killer B too. Is this a new concept for you? That smart people can actually have differences of opinions on matters? What are they teaching our boys and girls in school today? That they all have to agree all the time? How uneducated and boring. No wonder Nevada is at the bottom of the list.

    Carmine D

  13. Look who's talking: The seasick skipper from Gilligan's Island.

    You win the award in the category of most wordy and worthless posts here.

    Carmine D

  14. El Lobo:

    The obvious [smarts] doesn't need proving. It's self-evident, except to the obtuse.

    Carmine D