Las Vegas Sun NewsNevadans increasingly struggle to pay their mortgages even while their debt shrinks
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Courtesy of Sam Wagmeister
A home for sale in Las Vegas.
Wednesday
8 August 2012
11:22 a.m.
Nevadans are falling behind on their mortgage payments at a faster rate than homeowners in almost every other state, even though local borrowers are seeing their debt shrink.
Nevada had the second-highest mortgage delinquency rate nationwide, at 10.85 percent, in the quarter ending June 30, according to a report out today by TransUnion, a Chicago-based data research firm. Only Florida was higher, at 13.48 percent. The national rate was 5.49 percent.
North Dakota had the lowest delinquency rate in the country, at 1.32 percent.
Nevada also had one of the largest year-over-year declines in mortgage debt, according to TransUnion. Debt fell to $214,262 per borrower in the second quarter, from $244,100 a year earlier — a 12.2 percent drop.
The report comes a few weeks after the Nevada Association of Realtors reported that residents statewide are divided on whether it’s OK to willingly default on a mortgage loan.
Almost half — 45 percent — said there is nothing wrong with “strategic default,” in which homeowners who are financially capable of paying a mortgage choose not to make payments instead, according to the realtors group. An equal number disagreed, saying homeowners have a legal and ethical obligation to pay their mortgage if they can.
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I wonder why debt is down so much. Loan Modifications or if higher loan balances have defaulted?
Prices have jumped dramatically on the lower end ( condos and starter homes). Inventory is very low and it is next to impossible to get an accepted offer on anything. Multiple bids on everything.
It will be interesting to see if it holds.
Strategic default makes perfect sense. A mortgage is a contract which says if you don't pay then the bank gets the house. What's fair is fair. If you default, the bank gets the house. You held up your end of the contract. You shouldn't even have to take a credit hit because the bank got the house. That is the same as me loaning you $100 in exchange for you watch. If you don't pay, I keep your watch. There shouldn't be any difference except there is. The banking industry is always out to screw you over and all of their contracts & agreements are one sided.
There is nothing wrong with a strategic default. No one can predict what is going to happen in 10-30yrs. Nowadays employment is unsteady and income isn't rising.
Buying a home should be considered a business decision above all else, if the numbers aren't working out, move on quickly to the next best thing. You have to look out for yourself in this world. God knows no one else will.
You did not hold up your end there Enzo. 'Your end' was to pay the money back. You lend the $100 and keep the watch as collateral arrangement is to get your $100 back - or else the person is selling the watch to you for $100. you get ur $100 back or the penalty is you keep the watch. When you take out a loan - you promise to pay the money back or the contract is in default.
YOU PROMISE TO PAY THE MONEY BACK - NOT DEFAULT. thats how credit works you dumbazs.
Zackie - people who are unable to predict how they are going to make 30 years of payments are renters and should not take out a mortgage.
Buying a home is not a biz decision. what planet are you from? You live, sleep, eat, raise children and gather memories in a home not a business.
Wow, no wonder "george bush" and "the banks" screwed everyone.
Since Corporations are now People - People should act as Corporations. Just as Mitt Romney and Bain Capital did. When the Gig is no longer advantageous, or you see a chance to make a quick buck, to heck with everyone else - just Bail out - Take Your Money and Run.
I have a question. So you buy a $200,000 home let's say. You put $50,000 down let's say. It forecloses for what ever reason let's not even get into reasons yet. So not only do you lose your $50,000 but they take the house as well? If that's the case where is the risk for the bank? Why should they even be allowed to charge more then 1% interest?
Here's what the haters don't understand. Why should anyone or institution be allowed to take your Down Payment as well as the asset (House) if you can't make payments anymore? It should be if they take their property back, the home, then the down payment should be returned, less the payments missed leading to foreclosure.
Otherwise don't take away the asset. The bottom line is Banks love to foreclose on homes, if they didn't, they wouldn't be in such a hurry to foreclose on them and more willing to negotiate with home owners. Defaulting is something the banks have to deal with to make them realize we as homeowners are not helpless.
Jerry, you should pay the whole $200,000 up front if you don't like the rules. If you don't have the cash and don't like the rules, RENT.
It's these "strategic defaults" that are killing prices. The falling prices are a major cause of the huge decline in median net worth. Americans are trying to pay 2012 prices for goods and services when they have 1992 net worth.
Our irresponsible neighbors are killing us financially! There is nothing OK about millions refusing to pay their bills.
The key to successful financial management is "buy low, sell high". If you "bought high" shame on you. Its no different from the "tulip bubble" in the 1600s.
Just because you were dumb enough to succumb to the market frenzy in 2007/08 doesn't mean you don't owe the money YOU PROMISED to pay.
And if you default, then the lender can rightfully keep the property AND the money you've already paid.
People with cash today are thanking you for your foolish "investments."
I just came across the first Judicial Foreclosure that I've personally seen in Nevada and it's not pretty.
http://www.lasvegasrealestatehome.com/bl...
"Strategic Defaulters" might want to think twice...