A new report by a California tracking firm said Nevada had the second highest foreclosure rate in the nation in December.
The report by RealtyTrac Inc. found that there was one foreclosure for every 392 households in the Silver State, second only behind Colorado. The national average was one in 1,055 homes, the report said.
In Nevada, the report also found a wide disparity between northern and southern Nevada.
According to the report, Washoe County had 32 homes, one for every 4,498 households, in some point of the foreclosure process in December, about four times better than the national average for that month.
By contrast, Clark County had 2,163 homes, one in 277 households, in the foreclosure process in December.
"Much of the buying in southern Nevada was by people that were
going to not occupy the house, and they fully expected to flip the
house (once it was built)," said Thomas Powell, CEO of Reno-based
lender IntoHomes Mortgage Services Inc. and chairman of the Nevada
Mortgage Advisory Council.
"When it came time to actually put the mortgage in there, they had hoped to have the house sold. And that didn't happen this go-around when it had been happening year after a year for a period of a time."
Powell said those types of investor-buyers are the top candidates to fall into default. Such buyers aren't as prevalent in northern Nevada, he said.
"One, it's a much smaller market. Two, we think the builders up here did a good job of pushing down the speculative buyer pretty early on in the push," he said.
Northern Nevada builders have slowed their building, which has helped limit the rise in the foreclosure rate, said Thomas Vetica, operations specialist in the Reno office of the U.S. Department of Housing and Urban Development.
"Both markets, the housing appreciation rates went really high," Vetica said. "We just cooled, and the developers just stopped building."
Nationally, the foreclosure rate has risen because the overall housing market has cooled as interest-only and adjustable-rate mortgages have matured, making the monthly payment for mortgages more expensive as interest rates move higher.
"New foreclosure filings surpassed the 100,000 level for the fifth straight month, something we've not seen since we began issuing our foreclosure market report in January 2005," said James J. Saccacio, CEO of RealtyTrac in a release.
"While the number of new foreclosure filings dropped back from the high point of 2006 in November, the combination of slower home sales and rising interest rates on adjustable mortgages continues to drive foreclosures at significantly higher numbers than a year ago," Saccacio said.
(Copyright 2007 by The Associated Press. All Rights Reserved.)