Underwater Home Loans Still Common in Las Vegas
While being underwater on your home loan doesn’t always mean that you are going to lose your home to foreclosure, if you live in Nevada, the chances are that you will. In Nevada, the rate of foreclosure is still comparatively high and in over half of these cases, it is due to the fact that the home is worth less than what is owned. This is a huge problem that they are still dealing with in this state, although others are seeing some aspects of economic recovery.
What Does Being Underwater On Your Home Loan Mean?
When you are underwater on your mortgage, it means that you owe more money than your home is worth. During the housing boom, housing values were inflated and it was super easy to get a loan. When the housing market tanked, so did housing values, leaving many people owing much more than what their home is currently worth. In Nevada, this was a huge issue, leaving many people without a home when they were unable to make payments and could not sell their home for enough to get out from under it. While this issue is slowly getting better, it is not a quick process, which means that areas that were struck the hardest, like Nevada, are still trying to find a balance.
Nevada Underwater Home Loans
RealtyTrac, a real estate firm, says that about 55 percent of Nevada properties that are in some stage of foreclosure are also underwater on their loans. This number outpaces the national average by as much as 20 percent, which shows that Nevada is clearly still seeing effects from the housing crisis. This is difficult to understand, as Nevada is also seeing some gains in home sales and in housing prices. It can largely be attributed to the fact that Nevada was hit much harder than other areas in the country, which means that it will take longer for the state to recover. Eli Segall, Las Vegas Sun business reporter, said, “These housing problems are going to take a long time to really fully recover and heal.”
Las Vegas Underwater Homes
Unfortunately, Las Vegas was front and center when the housing bubble burst. It has been predicted that at one point 75% of the homeowners in Las Vegas were underwater on their loans and somewhere between 3 and 4000 homes each month were being foreclosed on and taken by the bank. This is a huge number, which means that it will take some time for Las Vegas and the state of Nevada to come back from this large percentage of underwater loans.
At this time, the underwater rate in the southern part of Nevada is around 25 percent. This is due to many factors, including the fact that investors are not buying the bank resells as quickly as they did in the past. It is only a matter of time, however, for the housing market to begin seeing more downward movement in the number of underwater homes.