For such a long time, we've become accustomed to bad news on housing... That I couldn't quite believe my eyes at first when I saw this.
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.
The president’s energy plan, which he introduced in Tuesday night’s State of the Union address, has three core components: the safe and responsible development of oil and gas, the creation of clean-energy jobs in the U.S., and increasing energy efficiency, with a special focus on the industrial sector.
That begins at the UPS facility in Las Vegas. The company, in cooperation with local governments and the South Coast Air Quality Management District, won a $5.6 million cost-share investment through the stimulus bill to purchase a fleet of trucks that could run on liquefied natural gas (LNG is a cleaner-burning fuel than regular gas or diesel) and construct a publicly accessible LNG refueling station — the first of its kind in the country.
The natural gas-fueled corridor allows UPS to move merchandise through more energy-efficient engines from Long Beach, Calif., to Salt Lake City, according to senior White House advisers.
It’s a model the president wants to replicate in other areas of the country as well, primarily by upping the incentives to get the country’s transport vehicles off gasoline.
Natural gas has become a focus of this administration, as well as lawmakers and energy advocates of all political stripes, not only because it burns about 30 percent cleaner than petroleum products, but also because it’s far more plentiful than oil in the United States. And, it’s cheaper.
The president aims to begin raising consumption of natural gas by encouraging companies to invest in trucks that run on natural gas with a tax credit, equivalent to about 50 percent of the cost difference between trucks that have engines that run on natural gas versus the standard diesel engine. Implementing such tax credits, senior White House advisers admitted, would require an act of Congress.
As we discussed on Tuesday, natural gas offers opportunities for cheaper, cleaner, and more domestically sourced fuel. Again, natural gas isn't without its own set of problems. But considering its availability and it not being as dirty as traditional oil or coal, it can be useful as a "transition tool" while we're still finding more ways to use renewables.
And of course, there's the possibility of more job creation out of this. And along with housing, jobs is the other big issue Nevadans want to hear about. We'll have to see how Obama threads it all together in his speech this afternoon.
Remember the run up to New Hampshire's primary? It may now seem like a million years ago, but it's really been just two weeks. Then, we learned that Sheldon Adelson planned to up the ante for his BFF Newt Gingrich. And regardless of what he says about what he supposedly knew (or not) about how Newt's Super PAC would nip at Mitt Romney's Achilles' Heel,
But Gingrich’s upset victory in South Carolina seems to show that potency of arguments that highlight the unfairness and inequality of our economic system. As Ruy Texeira writes, conservatives “should realize they’re attacking the opinions of most Americans who do, in fact, believe the system unfairly favors the wealthy“.
On CNN’s State of the Union yesterday, Gingrich took a bit of victory lap on the Bain attacks, acknowledging that they helped him win South Carolina because, he argued, they show voters where Romney is vulnerable against President Obama.
Indeed, after several weeks dominated by the controversy over Bain and Romney’s tax returns, the former governor risks losing his frontrunner status. Romney is down by double digits in Florida and is barely hanging onto a one point lead nationally, according to Gallup. For instance, one self-described “scorned woman” in South Carolina told TPM that she voted for Gingrich, even as lurid new revelations about his second wife were emerging, because of Romney’s waffling on his tax returns.
It’s worth remembering that in its early days, the Tea Party was nearly as anti-Wall Street as it was anti-government, galvanized by the Wall Street bailout. Much of that resentment likely remains, despite the best efforts of conservative elites to redirect that anger toward the government in order to white wash the distasteful record of companies like Bain.
Even though Sheldon Adelson is also "Mr. 1%" and he apparently wasn't all that into Newt's Bain attacks, his donation to Newt's Super-PAC just as it was about to release the "King of Bain" anti-Romney movie onto South Carolina airwaves nonetheless triggered this debate on economic inequality on the right. And what really makes this interesting is that despite all the efforts of the Nevada Republican Party to make its caucus totally irrelevant, Nevada and our biggest concerns may matter more in this election than we had ever imagined. And especially if Mittens plans to hit Newton on housing while Newton hits Mitten on Bain, perhaps Nevadans really will see more of a discussion on economic issues that we want answers on.
Of course, this probably won't be good for the G-O-TEA. Remember this?
Mittens doesn't want us to... But that's too bad. And funny enough, Sheldon Adelson is doing his part to help us remember.
While the White House tried to avoid predicting how many homeowners would benefit from the revamped refinancing program, the Federal Housing Finance Administration estimated an additional 1 million people would qualify. Moody's Analytics say the figure could be as high as 1.6 million.
Under Obama's proposal, homeowners who are still current on their mortgages would be able to refinance no matter how much their home value has dropped below what they still owe.
"Now, over the past two years, we've already taken some steps to help folks refinance their mortgages," Obama said, listing a series of measures. "But we can do more."
At the same time, Obama acknowledged that his latest proposal will not do all that's not needed to get the housing market back on its feet. "Given the magnitude of the housing bubble, and the huge inventory of unsold homes in places like Nevada, it will take time to solve these challenges," he said.
Is it a panacea? Not quite, since this is an executive order and not Congressional legislation that can assume broader authority. But for being such a limited program, it can still be of significant use here in Nevada.
Under the new program, homeowners who are current on their payments, have government-backed mortgages and who are up to 25 percent underwater will qualify for refinancing to a lower interest rate.
Although the program doesn’t address principal balances, it would make monthly payments more affordable, giving homeowners more money to spend, stimulating the economy.
The new program would also increase the ability of major banks to compete for the refinancing business, eliminate the need for an appraisal in many cases and reduce refinancing fees — all good things for Nevada homeowners, said Nasser Daneshvary, director of the Lied Institute for Real Estate Studies at UNLV.
“This is huge,” Daneshvary said. “If this is implemented, people really can find solutions now.”
Hmmm, I wonder which plan benefits Nevada more... "Don't try and stop the foreclosure process. Let it run its course and hit bottom."? Or real, concrete policy plans to start chipping away at the foreclosure crisis?
Yesterday, I saw perhaps the best LTE (letter to the editor) I've ever encountered here in Nevada. Steve Davis from Reno wrote this to The Sun:
Mitt Romney’s solution to the housing crisis in Nevada — foreclose on thousands of unlucky families so investors can scoop up real estate bargains that they can rent out — perfectly illustrates the real agenda of Wall Street and the GOP: return us to the two-class landlord system of Dickensian England, where the wealthy, aristocratic lords owned all the land, and the other 99 percent, the working class and peasantry, had to rent from them.
Wake up, America! When the middle class is gone, so is the American dream.
Hard as it is to hear for Las Vegas residents, Romney might be right, according to real estate experts and economists from across the spectrum.
Preventing the bubble by raising interest rates and enforcing tougher lending standards was the proper policy. Once the bubble inflated, however, it had to deflate and prices had to reach equilibrium before there could be any recovery. [...]
For whatever you think of Romney and his callous message to Nevadans, the lesson here is this: Once you’ve fallen for the scam — be it Tulips in 1630, Pets.com in 1999, or Las Vegas houses in 2005 — you shouldn’t expect to get repaid. The money wasn’t there in the first place.
But here's the thing: Coolican just admitted that the big banks pulled a scam on then new homeowners in the early to mid 2000s. And typically when this kind of crime is committed, victims can at least pursue proper restitution (as well as report to authorities so they can file criminal charges). Now perhaps not all the Las Vegas home buyers of the last decade were completely innocent, but one can't deny that their real or perceived "sins" pale in comparison to what Wall Street did to blow up the housing market. And for all those buyers who jumped in hopes of purchasing their first home and finally joining George W. Bush's "Ownership Society", should they bear the greatest burden of punishment for simply following Bush's advice and doing what our leaders were encouraging?
Teabaggers like to place blame on "Fannie & Freddie" and working poor minorities, but they're wrong. And Mitt Romney's wrong. And I suspect Coolican is going in the wrong direction here. But again, they're missing the real root of this crisis: Wall Street deregulation.
The conservative whipping boy of the 2008 [financial crisis] was Fannie Mae and Freddie Mac.** The GOP did everything in their power to steer focus away from the deregulation of Wall Street banks. They blamed people taking on more risk than they could afford. They didn’t blame the banks for providing the mechanisms to attract people into the market in the first place. Mechanisms like no doc loans, adjustable rate mortgages and no down payment loans were created by the Wall Street banks in order to increase customers into the housing market.
(** Fannie Mae and Freddie Mac are publicly traded companies on Wall Street)
Deregulation made this obtainable and possible. In a free market, banks should be allowed to offer what ever they want in order to attract consumption. The free market also allows mergers and acquisitions, thus creating TOO BIG TO FAIL.
If progressive policies were in place, all these financial mechanisms would be illegal. In fact, if progressive regulations were in place, too big too fail banks would also be illegal making this collapse of 2008 not even part of our history. There was a reason why there weren’t any bank bailouts from the 1940s to 1980s, it was progressive policies that were put in place by FDR and upheld by every administration until Reagan.
The 2008 collapse spurred the Dodd-Frank bill, and while this bill does not address as many problems as I and many other progressives would like, it does address financial mechanisms that attract people into the market that they would otherwise not be in. The Dodd-Frank bill creates a regulation mandating 10-20% down payment on mortgages.
Are underwater homeowners to blame for deregulating Wall Street, allowing banks to create and advertise "No Down Payment! Interest Only! Record Low Rates! Buy Now!" adjustable rate mortgages, then repackage and sell this bad debt as "AAA gold standard mortgage backed securities!"? Are underwater homeowners to blame for the enormous lack of regulatory oversight of the financial sector that reached its horrifying climax in the 2008 economic collapse? So why are underwater homeowners expected by the likes of Mitt Romney to "SUCK IT UP!" when Wall Street "21st century robber barons" are the chief culprits behind this fiasco?
So is that enough to put to rest the inane assertions that Mitt Romney is onto some great idea in wanting more home foreclosures? If not, then let me set aside all notions of altruism (for now) and get down to the economic nitty-gritty: Home foreclosures are a huge economic drag!
The fact remains that 1 million homeowners are expected to go into foreclosure this year, producing a serious drag on the economy. As Federal Reserve Chairman Ben Bernanke said in a speech today, “the housing sector has been a significant driver of recovery from most recessions in the United States since World War II, but this time — with an overhang of distressed and foreclosed properties, tight credit conditions for builders and potential homebuyers, and ongoing concerns by both potential borrowers and lenders about continued house price declines — the rate of new home construction has remained at less than one-third of its pre-crisis peak.”
If we follow Mitt Romney's advice to "let it run its course and hit the bottom", our economy will be in an even deeper hole that will be even more difficult to escape from. Housing has nearly always been the starting force in turning an economy from recession to recovery. So how do our communities benefit from empty homes? And yes, Romney's "do nothing and let the banks foreclose" policy prescription would lead to even more empty homes if implemented. And this leads to a "domino effect" of depressed home values, scared consumers, fewer home goods purchases, less construction, and fewer jobs. Properly addressing the home foreclosure crisis is not about "re-inflating the bubble", but rather restarting the economy.
I can't believe I'm saying this, but I have to agree with Brian Sandoval on this...
Without a doubt, expanded mediation programs would be a great start in solving this crisis. Continued mortgage financing reform can also help, albeit reform that avoids further privatization and deregulation in favor of a more balanced system that offers prospective buyers home loans that they can actually afford. And funny enough, Coolican actually mentioned in his article the idea of implementing "right to rent" programs that would allow the foreclosed the option of renting back their homes. Another idea out there involves "rehab and rent" programs that would employ workers in rehabilitating foreclosed properties before selling them in "neighborhood clusters" to investors willing to rent them out as affordable housing. But of course, all of these ideas involve some sort of federal intervention. There's really no way to solve the foreclosure crisis without some sort of government intervention.
Of course, Mitt Romney wouldn't be interested in any real solution to the foreclosure crisis, not when one of his top fundraisers is a lobbyist for the notorious robo-signing foreclosure mill that is Lending Processing Services! For Romney's friends, foreclosure is just too profitable to pass up. And there we have the real reason behind Romney's housing policies. It's always been about his bottom line, not the well being of Nevada or the country. It's callous, it's hurtful, and it's just plain wrong.
Yes, there's really a chance Utah might make an effort to move closer toward the 21st century and stop persecuting its LGBTQ citizens. Let's see if they can FINALLY make it happen next year.
Honestly, I'm still getting used to it. It's such a strange concept, especially for all of us "newbies" who move in after experiencing Las Vegas mainly as the tourist trap that we lovingly call The Strip. The Strip is always lively, always lit up to the hilt, always full of crazy drunk people doing wildly irresponsible things. How is that home?
But then I come to my lovely corner of Green Valley in Henderson, and everything changes. It's a sea of red-tiled roofs. It's full of families raising kids, quietly paying the bills, doing everything possible to avoid foreclosure, basically doing their best to be responsible citizens. Oddly enough, it's a community and it feels like home.
Stacy Willis explores the concept of calling Las Vegas home in this week's Las Vegas Weekly, though she comes at it from a slightly different perspective. With all these people losing their homes, where do they go? The homeless population has surged, and public and private agencies are scrambling to figure out what to do about it. Where can they go home? Do we have a responsibility in our home community to do something?
I feel blessed to call my home just that. But sometimes, I also feel a little fear as I wonder how close I may be to losing it and how close some of the people I know are to losing their homes. Is there a chance this will make us realize that so many of us actually want to call this place home and treat this great valley as such?
Wow. Harry Reid just gave me another sweet surprise. Let's hope he can get this good program extended so more working families can afford to buy that first home... And stimulate our economy a little more.
Senate Majority Leader Harry Reid said today he expects Congress by year’s end to extend the $8,000 tax credit for first-time homebuyers.
The program was launched as part of the economic recovery act, and is set to expire Dec. 1. Those eligible are first-time homebuyers in primary residences.
Reid said the program has support from both Democrats and Republicans, and continuing it would be on the agenda before Congress adjourns in December.
“We are going to extend that,” Reid said during a conference call with Nevada reporters.
“It’s something we can get done,” he said. “We have to do it by the end of the year.”
The sharp downturn in home sales, especially in hard hit Nevada, has continued to be a drag on the economy. Home buying is one of the best ways to stimulate economic activity, as new homeowners seek other goods and services, he said.
This is something to consider when folks talk about Vegas being "a bargain"... Maybe for househunters that can afford to "bargain hunt", but still not for far too many people.
Maybe... But not so fast. Remember that this is being fueled by "bargain hunters" looking for deeply discounted foreclosure and short sale homes. Hopefully the buying spree will continue, but I don't know how it can if unemployment goes higher and wages fall lower.
The Commerce Department reported that sales of new single-family homes rose 11 percent in June, an increase that dwarfed economists’ expectations of a 3 percent increase. The pace of home sales rose to a seasonally adjusted rate of 384,000 a year, the highest level since November.
But the figures offered no sign that the housing market had returned to health.
Despite the monthly increase, sales of new homes were still down 21 percent from June 2008. The market is still swamped by a glut of for-sale houses. And new homes, facing competition from cheap foreclosures, are sitting on the market for close to a year before they sell, compared with a median time of six months on the market in 2007.
