Housing:

Nevada drops to No. 6 in states racked by foreclosure

The view from the balcony of a condo for sale at the Ogden in downtown Las Vegas on Friday, Nov. 18, 2011.

Foreclosure Tour

Sen. Harry Reid addresses reporters on a plan to end the housing crisis for Las Vegas. Reid is standing outside a foreclosed home in the hardest hit neighborhood, zip code 89131. Launch slideshow »

Nevada’s foreclosure rate slackened last month, improving its spot in a national ranking but still keeping it in the top 10 for worst-hit states.

The state was No. 6 in the country in July for its volume of distressed real estate, with 1 in 415 homes in foreclosure, according to a report out Wednesday from Irvine, Calif.-based research firm RealtyTrac. California ranked No. 1 with 1 in 325 housing units in foreclosure; North Dakota was 50th with 1 in 105,833.

In March, Nevada moved to No. 2 on the list after leading the nation for 62 consecutive months. It reclaimed the top spot in April but fell to No. 3 in May.

Nevada’s lower-than-usual ranking in July was helped by a 34 percent drop in “foreclosure starts” — new notices of default and foreclosure sale notices — compared with June. The state had 1,065 foreclosure starts in July, down 66 percent from a year earlier.

The drop was likely caused by the so-called “robo-signing” law that took effect in Nevada last October. Under Assembly Bill 284, banks can start foreclosure proceedings only after filing a signed affidavit that says the lender has firsthand knowledge of the mortgage documents.

Foreclosure filings in Nevada subsequently plunged, but they have some signs of an uptick this year. Nevada had the nation’s highest foreclosure rate during the first half of the year, according to RealtyTrac. Nevada foreclosure starts jumped 61 percent from the first quarter to the second, indicating that lenders “are beginning to adjust” to AB 284, RealtyTrac said.

The report comes on the heels of a TransUnion report Wednesday that found that Nevadans are falling behind on their mortgage payments at a faster rate than homeowners in almost every other state, even though local borrowers are seeing their debt shrink.

Nevada had the second-highest mortgage delinquency rate nationwide, at 10.85 percent, in the quarter ending June 30, according to TransUnion. Only Florida was higher, at 13.48 percent. The national rate was 5.49 percent.

Still, Nevada had one of the largest year-over-year declines in mortgage debt, TransUnion said. Debt fell to $214,262 per borrower in the second quarter, from $244,100 a year earlier — a 12.2 percent drop.

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