Tag Archives: Nevada

Las Vegas Rated as Most Under Valued City: Reno Not on List

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Las Vegas was rated as the most undervalued real estate market in the nation.  The rating was made by Local Market Monitor.  Las Vegas was also rated as the worst housing buy.  How could that be?  I would assume that Las Vegas, like much of Nevada is still facing a massive number of foreclosures.
The list contains 15 under valued cities and 8 over valued cities.  The Reno-Sparks area was not on either list.
I don’t know all of their criteria, partly because I was not willing to pay for the information.
For more about Nevada real estate values.

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Massachusetts Supreme Court Rules against Wells Fargo in Foreclosure Case

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If you have been following the MERS involvement in the foreclosure crisis you are well aware of MERS and the robo-signer stories.  Courts have been ruling against MERS and the banks.  They have dismal record keeping procedures and the courts have ruled in favor of the homeowners.

The situation may have just come to a head in a case involving U.S. Bancorp and another involving Wells Fargo.  Neither of these cases involved MERS.  The Massachusetts Supreme Court, in a unanimous decision, ruled that neither Wells Fargo nor U.S. Bancorp have standing and consequently have no right to foreclose because they failed to show that they were holders of the mortgages at the time of foreclosure.

Justice Robert Cordy, in a concurring opinion, blasted the “utter carelessness” the banks demonstrated in documenting their right to own the properties.

This ruling is expected to slow down the foreclosures significantly and consequently significantly affect the entire home loan process and market place.

Massachusetts, like Nevada is a non-judicial foreclosure state.  If the banks were playing fast and loose in Massachusetts, what is the likelihood that they would have operated differently here in Nevada?

Do we face the prospect of having foreclosures overturned here too?



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Mapping Census Demographics and Economics

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The New York Times has a page called, “Mapping America.”  It is full of interesting data taken from the U.S. Census Bureau.  The map has demographic and economic data for each census tract.

Income Distribution for the Reno-Sparks area

The colors represent different income levels.

See the rest here.

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Bank of America Sued Over HAMP

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Bank of America is facing a blizzard of lawsuits because of its foreclosure policies.  One of these is a class action lawsuit claiming that B of A refused to participate in various foreclosure prevention programs even though they had agreed to do so when they took federal money.  Similar claims were also filed by the Attorney Generals of both Nevada and Arizona.

Do you remember the TARP program, where the government set out to “jump-start” the economy?

Well, one of the recipients of TARP fund was Bank of America.  They received $25 billion of US taxpayer money.  Yeah, I know the government claims it was their money but let’s not quibble.  As a condition to getting these 25 big ones, Bank of America signed a contract with the U.S. Treasury on April 17, 2009 agreeing to comply with the Home Affordable Modification Program (HAMP) to perform loan modifications and other foreclosure prevention services.

But, B of A has apparently resisted and avoided the actual participation in the HAMP program.  And the avoidance was, again, apparently to the degree that B of A is now facing several class action lawsuits claiming that B of A reneged on the deal and that the taxpayers and the losing home owners both suffered.

Now apparently, the servicers of these mortgages get paid $1000 each HAMP loan modification.  But, they make a whole lot more by simply continuing to “service” the loan.  So, why would they even remotely consider loan modifications?

Read more here.

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Shadow Inventory, Cooked Books; Spain’s 2011 Real Estate Funding Crisis

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The economic problems in Spain seem so far away, so why should we be concerned?  The world has discovered Spain and has found a major economic basket case.  What if Spain is but a preview of what could happen here on the US, and more specifically here in Nevada?

This article describes Spain’s dire situation and says the party is about to end.

In Spain, huge projects are completely empty and bad debts mounts as the Spanish banks play extend-and-pretend with developers. That game is about to end.

Developer loans are coming due. Yet, there is no way for developers to make interest payments let alone pay any principal. When developers collapse in 2011, banks will be stuck with a vast amount of undeveloped land at overvalued prices as well as ghost towns so far outside of major towns that no one will live in them.

A flood of inventory awaits a dearth of buyers. Moreover, a huge amount of shadow-inventory is waiting on deck, hoping for better prices so the owners can bail. Unfortunately there is no one to bail to. Spain’s official unemployment rate is 20%, and it’s quite likely the real unemployment rate is higher.

Can you see any parallels with Reno, our unemployment rate, perhaps?  I recognize that it is not quite 20%, officially, that is.  Can you see any signs that things are about to change?  The local media have stories that we are about to turn the corner.  Who would you want to trust?

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What is Nevada’s Real Unemployment Rate?

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This AP article said that Nevada’s unemployment rate dropped for October to 14.2%. But, did it really?

Nevada’s unemployment rate dropped in October to 14.2 percent, marking the first decrease in almost five years and suggesting the recession’s choking hold on the state’s economy may be easing, the Department of Employment, Training and Rehabilitation reported Monday.

The article was also published in the RGJ (I was no longer able to find that story). But notice that it came only four days after a somewhat different story that said Nevada’s GDP decline is the worst in the US.

Gross Domestic Product decreased in 38 states in 2009, including by 6.4 percent over 2008 in Nevada.The Silver State had the largest decline in the U.S.

Since all of the data is from government sources its veracity is questionable at best. The government wants to convince us that they are doing a good job and have changed the methods that they display the statistics for that very purpose.

Now, we get another article where it explains that the drop in unemployment is actually due to Nevadans leaving the state for greener pastures.  I tend to believe this story more that the others.

“Most likely, a number of workers have moved out of the state, while some have become discouraged and stopped looking for work,” he said.

Parker also said the state’s unemployment rate is heavily impacted by a decline in Nevada’s workforce as people leave the state and to look for work elsewhere.

Estimates show Nevada will lose 70,000 residents this year, Parker said.

The migration has been occurring for some time, Parker said, but this is the first month people have been leaving the state’s labor force faster than it has been losing jobs.

Ultimately, the decline should not be seen as a sign that Nevada is coming out of the recession, primarily because the state is still losing jobs.

I, for one, am not convinced that Nevada is anywhere near the end of the recession.

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