Nevadans headed for foreclosure not as quick to abandon home, report says

Sun file photo

The number of Nevadans who are underwater on their mortgages is down, but only because many have lost their homes to foreclosure, a report says.

Nevadans who are on track to lose their homes to foreclosure aren’t moving out nearly as often as they used to.

But the Silver State still has one of the highest rates of struggling homeowners who, before the banks take charge, pack their things and bolt.

Some 32 percent of homes statewide that are in the foreclosure process — but not yet bank-owned — have been vacated by the owners, according to a new report from RealtyTrac.

That gives Nevada the sixth-highest “Zombie” foreclosure rate in the country, behind Oregon (40 percent), Kansas (39 percent), Alabama (38 percent), West Virginia (35 percent) and Missouri (33 percent).

The rate nationally is 21 percent.

In Nevada, roughly 1,900 homes in the foreclosure process have been vacated, down 48 percent from a year earlier, RealtyTrac reported.

The research firm called the empty homes generally “one of the lingering legacies” of the housing crash, a “byproduct of lengthy foreclosure timelines and changing state foreclosure statutes.”

Nevada is ground zero for those changes.

Foreclosures have tapered off here largely because of a law that stretched out the foreclosure process, preventing banks from seizing homes en masse but leaving many residents in legal limbo. Such homeowners are behind on their mortgage and should, in theory, lose their house to foreclosure, but they haven’t because of banks’ paperwork delays.

After the housing bubble burst, foreclosures soared in Nevada, with lenders seizing about 2,500 homes a month in 2011. But state lawmakers drastically slowed that with the “robosigning” law, which took effect in fall 2011 and forced banks to provide more paperwork before they foreclosed.

Two more laws that could affect foreclosures also were approved last year, but they seem to work against each other.

Senate Bill 321, dubbed the Homeowner’s Bill of Rights, sought to make it easier for residents to avoid foreclosure. It bars bankers from trying to seize a person’s home while also pursuing a short sale at the same time, and it forces lenders to give homeowners more foreclosure prevention options and other information before seizing a house.

Assembly Bill 300, however, relaxed the robosigning law to make it easier for banks to foreclose.

Under the robosigning law, bank employees were forced to sign an affidavit saying they have personal knowledge of a property’s financial-document history before they seized the house.

Under AB300, a bank’s affidavit can be based simply on a review of internal lending records and either title paperwork or filings with the local county recorder.

Real Estate