Speculation spurs spike in Nevada foreclosures

Speculation spurs spike in Nevada foreclosures

With Nevada ranking first in the nation in foreclosure rates in the first quarter of 2007 and again in April, the mortgage lending industry and consumers are taking notice.

Although foreclosures were down from March’s 1 in 183 households to 1 in 232 households in April, numbers were still 225 percent higher than April 2006.

And insiders say what some call a crisis and others call an industry correction could reshape the mortgage-lending industry for all stakeholders.

Tom Powell, chairman of the Mortgage Advisory Council and chief executive of IntoHomes Mortgage Services in Northern Nevada, agree, saying that the last five to 10 years of bullish housing markets spurred speculators on.

Powell said speculators, who bought from developers, saw their investments appreciate before they were even completely constructed, and then sold those vacant homes for profit. But when the market plunged in mid-2006 many speculators were caught short, he said.

In Business Las Vegas

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