Nevada’s rise in home foreclosures leads nation
Nevada showed the highest increase in the nation in new residential foreclosures during the first quarter, the Mortgage Bankers Association reported Thursday.
The percentage of loans on which foreclosure was started during the first quarter jumped 0.19 of a percentage point to 0.76 percent in Nevada, according to the group. Also, the number of loans in foreclosure on March 31 climbed 0.32 of a percentage point to 1.16 percent in Nevada.
Nationally, the rate of foreclosures started on subprime adjustable rate mortgages increased to 3.23 percent from 2.7 percent, the association said. But Nevada and the other three states were "mainly responsible for that increase," Mortgage Bankers Association Doug Duncan said in a statement.
Adjustable-rate mortgages have interest rates that change periodically. Subprime mortgages are those made to individuals with below-standard credit ratings.
The financial trade group said Nevada, California, Arizona and Florida were responsible for the majority of the increase in foreclosure starts nationally in the first quarter.
"Without these four states, foreclosure stats would have declined (nationally)," Duncan said.
Foreclosures in Nevada and the other three states "are heavily influenced by speculators who are walking away from properties now that home prices have started to fall in areas of those states," Duncan said.
Excluding foreclosures, the percentage for delinquent mortgage loans on one- to four-unit residential properties decreased 0.38 of a percentage point to 3.73 percent in the first quarter, the association said.
The association’s survey covers a total of nearly 44 million loans nationwide.
Analysts estimate that nearly 2 million adjustable-rate mortgages will reset to higher rates this year and next. Some subprime borrowers were lured by an initially low "teaser" rates offered during the five-year housing boom that ended in 2005. But those teaser rates can rise sharply after the first few years, causing payment shocks.
Sen. Charles Schumer, D-N.Y., said the survey shows the need for his legislation to help homeowners avoid foreclosures by boosting funds to community groups that provide financial counseling.
"It is not too late to act to help families before they lose their homes," he said. "Left alone, a wave of new foreclosures threatens entire communities across the country."
The Associated Press contributed to this report.