I've already confessed that I'm a news junkie (Is there a 12-step program for that?) and that I listen to a lot of National Public Radio, so I won't get into that again. What I will mention is that I love that our local public radio station (KERA 90.1 FM) broadcasts the audio portion of The NewsHour with Jim Lehrer and I can listen to it on my way home from the office every evening and that between this show and The Diane Rehm Show in the morning I come up with great topics to write about.
Las Vegas has been in the news all week this week. Between the Democratic Candidates debate, O.J. Simpson going to court and the NAR flooding the streets of Las Vegas with Realtors®, despite tourism ads claiming the opposite, what's happened this week in Vegas has clearly not stayed there. One story, "Economic Issues Weigh on Minds of Las Vegas Voters" was reported by the smart and insightful Ray Suarez on Tuesday's edition of The NewsHour and from several different perspectives it was eye opening.
Nevada now has the highest rate of foreclosure of any state in the nation. According to the report, "One of every 61 homes is being lost by its owner." WOW! That number really hits home. There are 605 homeowners in my Condominium HOA. Based on that statistic, roughly 10 of my neighbors would lose their homes. Stop for a moment and put this number into terms that you can relate to. How many people do you have in your address book or PDA? Divide this number by 61. Whatever the result is, choose that many names from your list. Which of those people do you think deserve to lose their home to foreclosure? This is astounding.
Additionally, the report talked about how homeowners are struggling to save their homes. They interviewed one homeowner who had refinanced her home with an adjustable rate and at closing saw a roughly $200,000 balloon payment. She was told by her lender not to worry and they would refinance her again in a year at a fixed rate and it would all by OK... she should not worry. BAD ADVICE! She should have worried. Despite the fact that she has lived in and made payments on this home for 15 years she is now being advised to abandon the property and mortgage and begin again.
According to the story, the housing market is also affecting the state tax revenue, and since Nevada has no state income tax this is becoming such a concern that some people are questioning whether the state needs to reconsider how it funds the services it provides.
With one in 61 homes being lost to foreclosure I wonder if many could be saved through Short Sales or other mortgage restructuring programs. I also wonder if this is a sign of things to come for other states that so far have been less impacted by the rising rate of foreclosures nationally. My home state of Texas, like Nevada, has no state income tax, but fortunately has not seen the same severity of rising foreclosures... is it just a matter of time?
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