Thursday, September 27, 2012

What is going on with Short Sales in Las Vegas

What is happening in a Las Vegas with all the short sales? It is amazing that the short sale process is taking over the market.  Over half of the sales in August 2012 were shorts sales and only 16% of sales for August were bank owned sales. 

The climate for real estate has changed greatly over the past several months and the inventory is getting cleared but it is creating a problem.  There is not enough inventory on the market due to the abundance of underwater sellers.  There are hundreds of people who would love to sell if they could get their home sold and make a profit or at least break even.  Something has to give in Las Vegas.  There is no supply to fill the demand for homes.  Even with weaker demand, the limited number of units for sale, in the 4000 per month range, is not nearly enough to accommodate buyers.  It is as if another bubble is being created because of the lack of inventory.  It looks to be several years before things will be back to level in Las Vegas and the economy is suffering because of the circumstances

The willingness of banks to entertain a short sale is becoming more common place as banks realize the underwater problem is never ending.  If they do not clear some of the underwater homes from the market, the economy will continue to suffer as will home values.  The short sale also gives banks the ability to short circuit some of the issues they face due to AB 284.  AB 284 is the law that says original documents are needed for the bank to claim ownership and to foreclose on a property.  The short sale avoids this problem all together so the banks are very likely to do a short sale for you if you have one of those loans that was passed from company to company.  If there is any question about the original documentation for your loan, you can more often than not, get approval for a short sale. 

The short sale is the quickest and easy way for the bank to get out from under several problems and the most important being that they don't have the original paperwork.  You could fight for years to keep your home because bank does not have originals or you can cut a deal and get out from under the debt now and get on with your life. 

Get more information on Short Sales in Las Vegas HERE

Wednesday, September 26, 2012

On FICO’s Dubious Explanation of Why it Treats Short Sales the Same as Foreclosures « naked capitalism

April Charney sent me a link to a post which had a condescending explanation of a recent piece by FICO that warrants further discussion. The FICO article attempted to justify its position that someone who enters into a short sale gets his credit score dinged as badly as for a foreclosure. Yes, you read that correctly. One of the reasons many borrowers go to the effort to arrange a short sale, as opposed to the faster and easier process of “jingle mail” is that they assume that the damage to their credit score will be lower.
Here is the rationale, per FICO’s Banking Analytics blog (emphasis theirs):
One of the questions we get asked most often is whether it remains appropriate for the scoring model to treat a short sale in a manner similar to a foreclosure….
…we conducted a study isolating more recent occurrences of mortgage stress events. By studying the subsequent performance of these borrowers on all accounts, we determined the credit risk associated with their mortgage events. Looking at data from October 2009 to October 2011, we were able to verify that short sales and other events of recent mortgage distress continue to represent a high degree of risk. These results closely match earlier studies of the risk associated with short sales and other events of mortgage stress.
As the graph below shows, short sales remain extremely risky. However, foreclosures have a bad rate of 72.0% while short sales have a better bad rate of 55.1%. Should that lead to less punitive treatment for short sales?


On FICO’s Dubious Explanation of Why it Treats Short Sales the Same as Foreclosures « naked capitalism

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Consider It Sold Las Vegas: Short Sale accounts for nearly half of all August ...

Consider It Sold Las Vegas: Short Sale accounts for nearly half of all August ...: The Short sale is becoming so common place in Nevada that it will likely account for over half the sales in September 2012. It could possi...

Chris LaHaie Realtor
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Prudential Americana Group
Las Vegas, NV

Monday, September 24, 2012

Bank of America Offers Mods with a Gag Order to Buy Silence « naked capitalism

An inteesting tid bit offered here about the mission of banks.  It brings into question their motives.  However, I think most people know the motive of the large banks and the politicians running for office this fall:  "save our reputation and convince people we are all here to help".  The unfortunate reality is that the big banks are helping if the need to to save their reputation and if they are pressured enough by politicans looking to buy votes before the election.  They both are working hand and hand to profit from the real estate crash while attempting to appear like they wish to be part of the solution.  The reality is that all they have done is prolong the pain for just about everyone except the banks and the politicians.  The so called gag order as a requirement to agree to a loan modification is as anti American and the bank bailout itself.  It seems to indicate the banks are as self serving as ever and only looking to save face as they need and likely have an arbitrary process to approving or denying home loan modifications across the country. 

check out the full story below at Naked Capitalism by Yves Smith. 

Bank of America Offers Mods with a Gag Order to Buy Silence from Naked Capitalism

It appears the banks are in business of public relations just as much as politicians are because they are making attempts to silence the biggest complainers who are speaking out on the truths of doing a loan modification. 

Consider It Sold Las Vegas: Need to Buy or Sell in Las Vegas Consider These Fe...

Consider It Sold Las Vegas: Need to Buy or Sell in Las Vegas Consider These Fe...: If you need to buy or sell a home in Las Vegas there are a few things you need to consider. Las Vegas has the reputation for taking ...

Chris LaHaie Realtor
Prudential Americana Group,
Las Vegas, NV

Friday, September 21, 2012

Las Vegas Real Estate Story

Las Vegas Real Estate is getting back some price appreciation but the market is still in deep trouble.  If you were underwater by about 30% you might be back to even in some areas of the city.  This large of a rebound has only happened in very selected areas of the Las Vegas.  Some areas have been stagnating or even declining over the past year but over all Las Vegas Real Estate has seen about 15% price appreciation from last year according to recent statistics. 

So the hype that we have hit the real estate bottom might be true right?  It could be true for most parts of the country but it might not be true for Las Vegas Real Estate just yet.  The big reason for the upswing in prices is the massive reduction in inventories.  The real estate market is seeing record low numbers of sellers.  The bank owned property accounted for only 16%  of sales in August of 2012 while over 46% of closed sales where "short sales" as people or pushed to sell before the debt relief act that allows sellers to not be taxed on their forgiven debt, has people desperate to get out from under their mortgage. 

The illusion that is being created is that the demand for real estate is at a sky high level.  The reality is that the supply is so low that it can not even sustain below average demand levels. The good news is that there are people that qualify to buy property and they will buy something if they can find a suitable home in Las Vegas.  What is hurting sales now is the long drawn out process of the short sale and the large amount of underwater homeowners who will never short sell and likely never see their home be worth the current mortgage amount. 

Is there a solution to the devastating effects of the 60% drop in housing values in Las Vegas?  I don't really know but something has to give sooner or later.  My feeling is that the 17% drop in sales this August compared to last August in Las Vegas has much more to do with lack of inventory than slowing demand.  With inventory levels at records lows it is hard to tell what really is driving the drop in sales.  It could be the low number of newly created jobs as well as the high unemployment or it could just be that there are no homes to buy. 

It will be interesting to see how the banks proceed with the "shadow inventory" that is being whispered about daily in real estate offices in Las Vegas.  Are banks holding back thousands of homes or are they truly having problems taking back the real estate because they have lost the original paperwork? 

Nevada and particularly Las Vegas, has been devastated by the real estate crash.  People have suffered tremendously and thousands have lost good paying jobs.  You know it is serious when even casinos are going under.  If you can't make money off legal gaming, the economy must have been in the tank. 
Hopefully something will give so the real estate market will begin to find some equilibrium because now we are just seeing another bubble being created due to the extreme market changes. 

Get a Free Home Evaluation in Las Vegas for a short sale or traditional sale here

Saturday, September 1, 2012

Banks getting push back from courts on PSA's

The banks are finally getting resistance from the cour regarding the PSA's regarding securitization of mortgages.  The Pooling Service Agreements are the documents that set forth the rules regarding securitizing mortgages to be sold on Wall Street.  Banks have been given a free pass for many years whle they have failed to follow the PSA requirements in proper fashion.

You can read much more on the push back from the courts regarding bank's failure to abide by the PSA's.  Read more here

Consider It Sold Las Vegas: Avoid being Scammed during Foreclosure

Consider It Sold Las Vegas: Avoid being Scammed during Foreclosure: Everyone that may be going through foreclosure or who is considering a short sale needs to be very careful. It is not uncommon for unscrupu...

Chris LaHaie Realtor
List with Chris
Prudential Americana Group
Las Vegas, NV