Panel: Borrowers trashing homes
Associated Press Writer
Some Nevadans who fall behind on their mortgages and face foreclosure are trashing the homes as they move out, a legislative study panel was told Tuesday.
Gail Burks of the Las Vegas-based Nevada Fair Housing Center said there’s an increase in Southern Nevada borrowers who are giving up when faced with foreclosure and “are taking things out of the property, they’re putting cement down the plumbing.”
Burks also said she’s seen an increase in violations of a new state law that’s intended to block bogus real estate deals and ensure that borrowers can afford a home loan. She also said there are more cases of renters being forced from homes going through foreclosure.
Consumers who try to refinance face a major problem because of Nevada’s status as a high-risk market, Burks said, adding that means a cut in the amount that can be borrowed atop an already reduced figure due to the decreased value of homes.
Assemblyman Marcus Conklin, D-Las Vegas, the study subcommittee chairman, said the destruction to homes shows a loss of hope among people who figure there’s no way they can refinance their loans so that they can stay in their homes.
“It’s bad behavior compounded by more bad behavior,” said Assemblyman Tom Grady, R-Yerington, a subcommittee member.
“It’s not a new phenomenon,” Conklin said after the hearing. “People are upset that they’re losing their homes and on their way out say, ‘Heck, burn it down.”‘
While Burks didn’t provide the subcommittee with statistics on damage by people forced from homes, Michele Johnson of Las Vegas-based Consumer Credit Counseling Service had plenty of statistics on the severity of the mortgage crisis in Nevada.
Johnson told the panel that 6.5 percent of about 574,000 home loans serviced in the state in the last quarter of 2007 were past due, up about 16 percent from the previous quarter. She added that foreclosure “starts” were up about 34 percent in the same period.
In the case of subprime loans, Johnson said that of about 101,000 serviced in the last quarter of 2007 nearly 17 percent were past due – and foreclosure starts were up about 43 percent.
Conklin said the statistics show how bad the crisis is in Nevada – which has the nation’s worst foreclosure rate. He added that when the reports come out on the January-March 2008 period “I suspect that the first quarter will be worse.”
Johnson also brought up the problems that renters face as a result of the foreclosures, saying, “Regardless of whether it’s an owner-occupied or investor property, it’s still hurting the constituents of Nevada.”
Based on the testimony at Tuesday’s meeting and at previous sessions, the study panel will come up with recommendations on law changes that the 2009 Legislature can consider.