Nevada is known as one of the hardest hit areas in the real estate market, especially in terms of the number of the foreclosures it has on record. Las Vegas and other cities in Southern Nevada are some of the distressed areas that will receive $47 Million from the federal government to help problematic homeowners with refinancing their at-risk loans and assist lenders in getting more people into foreclosed homes.
Analysts surmise that the rising number of Las Vegas foreclosure homes can be attributed to unemployment, where homeowners lose their jobs and therefore can’t afford to continue paying their monthly installments. Others see most Las Vegas foreclosures come from non-owner occupied properties or those homes bought for the purpose of being let as a holiday retreat but end up as having no-takers in the long run.
In most cases, Las Vegas foreclosures are basically a result of homeowners dealing with bad loans. They are taken in by smooth-talking mortgage lenders and end up borrowing more than they can afford with their homes appraised at even double the price. This is also aggravated when they don’t approach their original lenders to negotiate for better payment schemes given a change in their financial situation. Instead, they end up being victims of foreclosure homes buyers who offer as much as 80% less than the fair market value of their property.
In fairness to Las Vegas foreclosure companies, some of them are also having a tough time. With so many homeowners offering to sell their homes, they can only pick out 1 or 2 possibilities. Most of these sellers have practically no equity or are upside-down with their debts.
One alarming “solution" that others have tried is the “buy and bail" strategy. For those who can afford it and are willing to risk getting a bad credit report on their file, they have found that they can buy a second home at the more affordable rates (considering the number of available foreclosed homes on the market) and simply let their former/original home be foreclosed or be sold to the bank (at a loss), whichever happens first.