Diane posits the inquiry:
“why wouldn’t the other 75% try to sell first, salvage their credit and negotiate a solution with the bank? Is it fear? Denial? Ignorance? All of the above?”

In doing some pro bono legal assistance work, I learned that people in such dire straits are so far down that there is nothing to salvage– no credit, absolutely no chance of any equity, nothing left. They are down to no cash and no resources, very little income. Eating and shelter are their issues, not curing or avoiding credit problems. Typically they have some other problem which caused the financial crisis: a serious illness, a child in the justice system, a lay-off at work. There are about three to five things higher on their priority list then working out a deal with their lender. It is a sad situation.

Just exactly how is there a way out? You lied on your loan application and stated that you make more money that you really do. You put none of your own money into the deal, relying on Somebody’s Else’s Money to buy a more expensive house than you could ever have honestly afforded. Even with the Lie, you had to get an ARM to “qualify” for even the teaser rate start up payment. Now, because houses in Reno, apparently, don’t always just rise up in value into the sunset forever, your house is worth less than you “paid” for it. You have no equity, you can’t refinance because you owe more than the house is worth, and now the damn lenders are actually requiring verification of income. And now, all your enablers, the realtor and the mortgage broker and the appraiser who just winked and looked the other way in anticipation of the fees and commissions, are nowhere to be found.

Tell me, just what is the rational, sane, feasible solution?

I’ve been wondering where all the people who lose their homes go. Where are they living now? Don’t landlords check credit and references before renting out houses? Do these people find landlords who are close to losing houses themselves and desperate enough to take anyone with a month’s rent? Are the people evicted in foreclosures sneaking back later and squatting in their formerly owned houses? (I guess you wouldn’t have to file a change of address with the post office if you did that.) Are they moving in with relatives? I don’t think they’re all living on the streets because I haven’t heard of any of the homeless shelter people talking about a noticeable increase this year. (That may be coming, though.)

One thing I noticed in the first article is how neighbors are parking on the lawns of vacant houses. That really bothers me. I can’t think of any excuse for that.

Stjoe wrote: “how much due diligence did you do before you wrote the line…[WHITE PICKET FENCES]…understands how to work the system?”

Wow, am I impressed. One of the things I like about this blog is that a number of us look at a half filled glass of water and think it’s half empty [by definition this disqualifies us from being real estate salespersons]!

For what it’s worth, I too went to the WPF web site and did some looking around of my own. I was hoping to find something impressive under “about us;” but I didn’t.

Although I can see where professional assistance might be helpful in packaging a short sale presentation to a lender, the suggestion that an institutional lender won’t send a borrower relieved of debt an IRC 1099; or that through negotiation, such a borrower can be relieved of the income tax due on that relieved debt; IMO is absolute garbage.

Notwithstanding, I did fill out the more info form so that I too can buy property at wholesale [amazing what these unlicensed persons can do that licensees can’t, and then make enough additional money on the deal to sell it to me at wholesale]. I’ll keep the group informed.

And since we’re talking about third party outfits who know how to work the system, has anyone dealt with Equity Lending Partners aka ELP [out of Reno]? I could tell you some stories about the “so called” deed of trust investment in a new Squaw Valley project they recently marketed in the RGJ. Representations of super low LTVs were based on an absolutely bogus appraisal by an uncertified appraiser-licensee.

It just goes to show all of us that before we jump on any so called professional’s band wagon, we’d better know exactly what we’re doing!

Why no squatters in Somersett (yet) with over 50% vacant houses? Is the location THAT bad in relation to public transportation? And were the building materials used so poor in quality to be beneath salvage value to the meth set?

Yes and Yes. At least the crackheads can catch a bus from Damonte Ranch to the mall.

Numbers from Foreclosure.com:

Washoe County:
Pre-foreclosure 1,171
Sheriff sale 106
Foreclosure 341
BK 325
FSBO 50

Numbers are current at time of this post (they seem to be increasing at an explosive pace).

I’ve been tracking these numbers for awhile, along with some areas in CA. I (also) have family in the Bay area and found your information to be very correct. Trashed and abandoned homes are bad news for everyone.

On a slightly different note:
Your RGJ is an interesting read for the Reno area. I like reading local newspapers of a community, but their downfall is the cautious approach to bad news and skirting hard facts affecting the local economy. I wonder how many sellers and their agents are just oblivious to what is taking place in the housing market,
not to mention the economy.

As a potential buyer in the area, I’ll admit to having had a personal agenda for a seller to reduce price. Notice “had” as in past tense. Never, ever thought I would entertain renting, but it is becoming a viable and real option.

Of course “editorial content is strongly influenced by its advertising revenues.”

Years ago, I used to write product reviews for a national magazine. As my hazy memory recalls it, one review said the product barely worked and the vendor demo data base was too big to work with the real program. I verified these allegations with the vendor’s tech support.

I got a call from the editor stating the review had been canceled. The publisher bought too much advertising to run a negative review.

You know who the “noted’ economist was who said All Is Well here in Northern Nevada? Dr. Eugenio Aleman works for a bank, Wells Fargo, and he goes around the country speaking at Chamber of Commerce gatherings saying that the local economy, because it is unique and immune to national trends, will be strong and robust. He says this in reference to the local economy wherever he happens to be speaking. Just for kicks I googled Eugenio Aleman and found a link to the Grand Rapids Michigan Chamber of Commerce. Seems Dr. Aleman was there not too long ago and he said the local economy in Grand Rapids, because it is unique, will do fine. So, it seems that wherever he goes, Mr. Aleman sees a strong local economy.

I think Eugenio Aleman goes lots of places and tells Chamber types everywhere their local economy, because it is special and unique, is immune to national economic forces. I’ll bet Mr. Aleman is one of those “economists” who has never seen a local economy that wasn’t doing just great.

It’s just too much to ask for a RGJ reporter to take the time to do 5 minutes research. But then again, the RGJ only exists to serve the interests of its real estate advertisers. We wouldn’t want to muddle that up with any facts.

The irony of it all is that last week, the CEO of Wells Fargo, for whom Mr. Aleman works, said that he thinks we are about to enter the worst housing market since the Great Depression.

Sorry! Fixed!

Bantering Bear you couldn’t be more wrong. I’m so tired of these generic statements about downtown when you probably have done little to no research in exactly what’s transpired downtown in the past three years. Did you know the downtown office market is doing BETTER than most of Reno? The South Reno office market is deflating while downtown’s vacancy rate is going down. Did you know over $300,000,000 has been invested in existing building acquisition including the BofA Building, the Wells Fargo Building, the Jc Penney Building, the Waterfront Offices, the Museum Tower (which is now fully leased for the first time in over a decade). Did you know there have been over $90,000,000 invested the past three years in private property acquisition in various blocks of downtown which people are slowly assembling and combining for future development? Did you know Riverwalk Towers is finally remodelling their bottom floor for incoming retail, and the Montage already has their retail spaces lined up. Did you know Olympia Gaming, the folks building the giant casino by Sparks Marina, is buying the Circus Circus, and most likely has a major overhaul planned? Did you know Leal has a major overhaul planned for the Fitz? Did you know the City is continually pumping money into art projects downtown? Did you know as we speak, architects are submitting their bids to completely redo the facades of all the buildings between Virginia Street and Commercial Row? Did you know 5 of the 11 units fo Ponte Vecchio on Riverside Dr. are reserved already, and range from $800,000 to over $1 million each? Did you know the vacancy rates of most of the projects downtown, including the Palladio, pale in comparison to the vacancy rates and number of homes for sale in the burbs? I’d live with Palladio’s 26 out of 92 units vacant over half of Sommersett being vacant any day. I’d pick Riverwalk’s 15 or so units for sale over half of Starcrest Village in Wingfield Springs for sale any day. I’m just saying, don’t bash downtown when a good part of Reno is in far, far worse shape. As far as downtown being dead, well, I get 7,000+ unique visitors a month to my site, all people interested in downtown. http://www.downtownmakeover.com/downtown_reno_gallery.asp check out my gallery, you may see downtown in a different light. My site is proof people are VERY interested in downtown Reno, or else 174 people wouldn’t have clicked to my site using the keyword ‘Palladio’ in google, or on and on. Trust me, from someone who follows downtown development almost obsessively, downtown is far from dead, and these days looking more desirable than living in a vacant subdivision with weeds growing in every other yard.

Mike Van H:

Keep up the good work. I admire what you are doing. I know there is a lot of money being pumped into downtown, as you have accurately pointed out, and I hope it works. I suppose I am overly skeptical because it has never worked before. And, many of these projects seem to move along at a snails pace, some never materializing.

Retail has never been great in downtown Reno. Has this changed? Tourism is down, and the increasing number of casinos on reservation lands only contributes to the problem. There are many, many completed yet vacant, unsold condos. Furthermore, many of the recently sold condos have absentee owners, exacerbating the vacancy problem. We’ll have to see how this plays out. I’m not optimistic.

There may be 66 Palladio units sold, but I can tell you there is no way that 66 of them are being lived in. Unless the occupants are, literally, living in the dark.

Just walk around the Palladio at night. No way is that building 70% occupied. There are signs of life on the south facing side, maybe 1/2 of the units have lights on. The north facing side, maybe 1/5 is lit up. Maybe. The west and east facing sides have barely any signs of life. Darkness.

Maybe the proverbial Rich Californians decided to buy a 2d home in the Palladio and not Montreux? Maybe the owners closed but haven’t moved in yet? Maybe they just like to live without the lights on?

Mike Z, when I referred to that number, I was referring to private property acquisition purely for the land….these people who are buying up entire blocks are not doing so so they have a group of old run down crack houses to call rentals, they are doing so to demolish the homes, combine the lots, and building new more massive developments. So the Bubble argument is totally irrelevant in this case, because these people are buying the properties for the land, not the homes. Here is one example http://www.downtownmakeover.com/north-east-downtown.asp, and you can look at property directly West of downtown to see another example, and also property gathering and combining in the Kuenzli/2nd Street area as well. I have been tracking all these guys for 2 years snatch up property regardless of the price or what’s on the property, and almost always the properties are connected or set up to be combined for larger developments. And yes, the purchases this year have been very steady. Purchases downtown this year include a lot of the property I outlined. Their purchases aren’t based on market timing, their purchases the past three years have been based on when the current owners decide to sell to them. I should have been more clear in my post, I wasn’t referring to private property acquisition just as places to live (i.e. Palladio, Riverwalk), I was referring to property acquisition for future development/demolition.

That’s exciting there’s so many activity going on downtown. I’ll be the first to say congratulations by the way downtown dude on successfully lobbying to get the train trench cover passed. I’ve never seen so many positive comments. Did you hear about the recent improvements to the common areas on top of Park Towers? They are nice. Reno Igor, I have a view of the Palladio from my balcony on Park Towers every night. A lot of executives/business travelers must live there because different lights are on and off throughout the week. A resident there recently told me about 50 of the sold units are occupied full time, but none of them are families. She had not run into a kid yet in that complex.

LMAO!

$2980/month!

http://reno.craigslist.org/apa/494478599.html

RE: “And yes, the purchases this year have been very steady.”

How much has been invested in the last year?

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