The housing debacle in Las Vegas and throughout the country is testing consumers' patience in a major way. Real estate values have eroded without mercy in many areas, to the tune of double digit percentages. Some Southern Nevada - featuring Summerlin, Mountains Edge, Henderson, North Las Vegas, Pahrump, Southern Highlands and Anthem - communities have seen drops in the 50 to 60% range. Many homeowners here and elsewhere, as a result of that, find themselves underwater, meaning the underlying mortgage is higher than the property's value. The foreclosure epidemic hasn't let up yet, either. There really isn't much to write home about.
Those applying for a mortgage loan nowadays have run into their own set of issues, largely thanks to the unstable housing market.
To approve and close a mortgage took 30 days in 2008, but this year that time span has grown to almost 47 days, asserts J.D. Power and Associates in its recent study. That is a serious jump and Las Vegas mortgage borrowers certainly can identify with it. Main reason is the added scrutiny every home loan application now receives. Mortgage providers continue walking on thin ice and are doing everything to avoid approving loans that may not work out. A half inch mortgage file can balloon into a 2-inch thick stack after all the supporting documents the nit-picking underwriter requests are in. That kind of stuff can test any applicant's staying power.
Also, home loan firms seem to have shifted some resources away from origination to deal with foreclosures, short sales and mortgage modifications. And what not. It obviously will slow down the already lengthy process even further. So, when J.D. Power comes and asks How did it go?, the consumers will first take a deep breath and then happily let it all out.
There is a way, however, to keep mortgage applicants more or less happy. It has been tested time and again and it works. It's called communication. Home loan originators, and even real estate agents, could include a brief explanation about the current thorny state of the market and the potential challenges it may present early on in the process and that would help prepare them for the journey to a satisfying closing. And a new home.