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NVAR Report Finds Most Distressed Nevada Homeowners Unaware of Assistance and Programs

NationalMortgageProfessional.com
Feb 01, 2011

The Nevada Association of Realtors (NVAR) has released a report titled, “Face of Foreclosure” that shows most Nevada homeowners facing foreclosure were not aware of federal and non-profit programs designed to help them and that nearly one in four who lost their homes to foreclosure admitted to “walking away” as part of a strategic default. NVAR found this and more in its second statewide report on the home foreclosure issue that continues to plague Nevada’s economy, housing market and neighborhoods. NVAR 2010 President Linda Rheinberger, broker and owner of One Source Realty and Management in Las Vegas, said the report conducted for NVAR by the SGS national research firm contained several interesting findings and points to at least a few changes that could help homeowners avoid foreclosure. “With Nevada continuing to have the highest foreclosure rates in the country, we think this landmark research provides a valuable public service,” Rheinberger said. “We think this research will help the public, the real estate industry, lawmakers and others grappling with this difficult issue. Personally, it was striking to see that nearly one in four Nevadans who lost their homes to foreclosure admitted that they simply walked away from their mortgage. Highlights of the NVAR report include: ►Very few Nevadans facing foreclosure knew about the leading programs available to them, and fewer still found them helpful. The report cites “a clear disconnect between what programs are being offered and what is needed and used by those facing foreclosure.” For example, 61 percent of those surveyed after experiencing or narrowly avoiding foreclosure had never heard of the federal Home Affordable Foreclosure Alternative (HAFA) program. Only three percent said they used the Nevada Foreclosure Mediation Program or were helped by it in any way. ►By their own admission, 23 percent of those surveyed described their own situation as a strategic default, defined as the borrower deciding to stop making payments on a debt despite having the financial ability to pay. ►Many of those who “walked away” from their homes said they were advised by trusted confidants that a strategic default was their best option. ►The rural counties of Lyon (with one in 49 homes receiving a foreclosure notice, based on October 2010 RealtyTrac data) and Nye (one in 66 homes) had the state’s highest foreclosure rates, followed by Clark County (with one in 70 homes). ►Many Nevadans experiencing foreclosure faced two or more “life-altering events” that increased their risk of defaulting on their mortgage. The report found loss of a job and unexpected medical bills were the most common of what it called “plus-one” events triggering a foreclosure. ►Homeowners statewide were far more likely to blame banks and lenders (46 percent) and the government (20 percent) than homebuyers (13 percent) for foreclosures. ►Short sales have proved to be “a moderately helpful tool in avoiding foreclosure,” with the report showing that 10 percent of those surveyed believed a short sale helped them. Mike Young, NVAR president for 2011 and a longtime Realtor based in Incline Village, Nev., said NVAR is already working with Nevada lawmakers and others to seek changes that could help this situation. According to the report, these include a mix of legislative changes, advocacy and counseling options and actions designed to stabilize local housing markets, such as streamlining short sales. "As for solutions, there may not be a single cure-all, but this report suggests that we can do more to make distressed homeowners aware of the free and low-cost resources available to help them," Rheinberger said. "It also reinforces our belief that lenders would do well to speak to their customers before foreclosing and to continue streamlining their short sale processes, since short sales are one viable alternative to foreclosures.” The report was commissioned by NVAR, utilizing information from its Nevada DataMine, and conducted by SGS, a national research firm that has done similar studies in Florida and Pennsylvania. SGS compiled data from leading sources, held two focus groups in Las Vegas and interviewed more than 1,000 Nevadans by phone, including 500 who had either experienced, were experiencing or narrowly avoided foreclosure and another 500 who live in areas throughout the state with high foreclosure rates. Click here for a copy of the “Face of Foreclosure” report. For more information, visit www.NVAR.org.
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