Wave after Wave of Foreclosures Lashing Las Vegas

Posted on August 29, 2008
Filed Under Repo Homes |

With property prices falling by 30% in Las Vegas pundits might be prompted to think that the worst is over. But wave after wave of repo homes continue to lash Las Vegas. Some realtors know that the valley will be continued to be flooded with vacant houses. The blame lies squarely on predatory lending. It is this that has led to the collapse of the real estate market hurting many with foreclosures. The scars run deep and despite various measures are refusing to heal.

Realtors find themselves in a fix. Many consider them to be the villains in the piece. The reputation of realtors has taken a battering and the people are saying that they have got what they deserve.

Predatory lending fall under two categories – the liar loans and the ninja loans. In liar loans the lender has turned a blind eye to permit the borrowers to tell lies about their annual income. It allows for a bigger house and skirts the hassle of bank scrutiny. The ninja loans come from the word ‘no’. It refers to loans being handed out to those with no income, no jobs and no assets. In short – they had no right whatsoever to own a house. But they walked into one with dubious papers in their pockets relying on the fact that prices would shoot up. This sort of speculation led to the foreclosure crisis. The causes were a cocktail of greed, speculation and ridiculous hopes.

For the lenders it was a winning game on both sides of the net. If the prices shot up they would continue to pocket the interest. If the borrowers failed to pay, the lenders would get the house. There was nothing to lose for them. This game continues as adjustable rates are again going to go up and the liars and ninjas will again pocket gains. The foreclosure wave will in all probability continue for another three years. While the Las Vegas markets slowly try to stand up, the ninjas and liars under cover of foreclosures are enjoying the last laugh.

There are other factors contributing to the pall of gloom – the general condition of the economy triggered by rising food and oil prices. The cocktail of woes have led to unemployment. Without any income how can loans be cleared? With presidential elections just around the corner America staggers under the weight of the foreclosure crisis.