Nevada’s foreclosure rate remains fifth in the nation after big drops in activity compared with last year.
RealtyTrac reports Thursday that Nevada’s September foreclosure rate is down 19 percent from August and down more than 75 percent from the same time last year.
The drop reflects the national foreclosure picture for the month of September. RealtyTrac reports the lowest total number of foreclosure filings nationally since July 2007.
Last October, we were #1 in foreclosures and had more than 3 times as many. While there's still too much pain happening in the housing market here, it's increasingly looking like the market is healing.
So why are we finally seeing some healing now? Much of it has to do with state policies here. AB 149 was a good start in making the big banks take negotiation with distressed homeowners seriously, and further action to require proper documentation before foreclosing on a property has also helped bring down the foreclosure rate.
However, Nevada may have also been helped in the past year by recent federal action that finally seems to be taking hold and providing relief. Yesterday, Salon's Andrew Leonard noted the interesting evolution of housing policy under the Obama Administration, and how it's finally working.
The housing sector is clearly rebounding —home prices are rising, mortgage delinquencies are falling, inventory of unsold houses is shrinking. As a result, consumer confidence is growing and Americans are feeling more comfortable risking their savings on big, economically relevant purchases, like new cars.
A clear case can be made that government policy has played a crucial role in this rebound. There are two parts to the story. First, the Fed’s most recent round of monetary stimulus push —aka quantitative easing —has pushed mortgage interest rates to an absurdly low 3.5 percent, encouraging a wave of new refinancing and new purchase activity.
Second, the White House’s latest, greatest plan to help homeowners, the Home Affordable Refinance Program 2.0, has gained real traction, helping homeowners underwater on their mortgages become eligible to refinance. According to a Bloomberg report, “since the start of 2012, there's been a 65 percent increase in refis for borrowers who owe at least 20 percent more than their homes are worth; HARP now accounts for about a quarter of all refis.”
The Fed’s new determination to pursue monetary stimulus until the unemployment rate falls significantly is at least in part due to Fed Chairman Ben Bernanke’s ability to rally support from Obama’s new appointees to the Federal Reserve. The relative success of HARP 2.0 is a tribute to the administration’s willingness to keep tinkering with policy levers until it found something that worked. In both cases, you can argue that the administration took far too long to exert its will, but this is also clearly a case of better late then never. If you want to understand why the number of Americans who think the country is on the wrong track is finally dropping, the housing rebound offers one of the best explanations, and some portion of responsibility for that goes to the administration.
It's taken a while. And during that period, people were still suffering. But now, we're seeing progress. And it's largely thanks to both and state and federal policies meant to help distressed homeowners find relief and stay in their homes.
Contrary to what Mitt Romney and the "tea party" claimed were foolish attempts to "stop the foreclosure process", it turns out that meaningful policies to stem the crushing tidal wave of foreclosures can actually work when given a chance. Don't believe me? Step out the front door. There aren't as many front doors marred by blue tape and legal notices, and that really is a good thing.