FHA mortgages in Vegas soon to cover wider range

Southern Nevada - with communities like Henderson, North Las Vegas, Mountains Edge, Rhodes Ranch, Summerlin and Anthem - real estate purchases have recently been financed increasingly with FHA products that offer mortgage applicants more considerate underwriting guidelines and lower down payments than the conventional ones. Without FHA it is hard to imagine what a darker place Las Vegas housing market would otherwise be in right now. And things are going to get even better soon.

HUD just announced an adjustment to the FHA home loan program. Presently, with some exceptions, FHA outlaws insuring a mortgage on a property owned by the seller less than 90 days. The change is going to take place on February 1, 2010 and will be in effect for one year, although it can be either extended or mothballed with a magic flip of a switch by the FHA corner office. In other words, it's temporary.

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Freddie Mac and Fannie Mae to get further Treasury support - Las Vegas mortgage borrowers to benefit?

The giant GSEs - or Government-sponsored Enterprises - have been mandated to provide liquidity to the mortgage marketplace and over the years they have fulfilled that role very successfully. They grew to dominate the conventional conforming home loan segment. But when the world-famous housing bubble began gathering steam Fannie Mae and Freddie Mac somehow got caught in its frenzy, were thoroughly ill-treated when it burst and eventually ended up being put into a government conservatorship. Their total failure was not an option.

These mortgage companies are still reeling, absorbing heavy blows as the battered real estate market spawns more foreclosures.

The Treasury Department just made a daring decision on their behalf. See, under the original conservatorship arrangement Fannie Mae and Freddie Mac had a $400 billion war chest from which to draw liquidity when needed. Thus far they have used about $112 billion of it. Now the Treasury has removed the limit and actually pledges to pour in as much funding "as necessary" to keep them going. Obviously the Treasury is anticipating something unpleasant waiting around the bend, so it's getting ready for that. Being pro-active is a good thing.

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Las Vegas new home prices drop more

Southern Nevada resale housing market - covering subdivisions in Summerlin, Henderson, Southern Highlands, Anthem, Silverstone Ranch, Rhodes Ranch and Green Valley - has proved in the past several months that it does have a pulse. Motivated by affordable mortgage money, shamelessly low prices and eye-catching tax incentives people - mostly first-time buyers and real estate investors that is - have waltzed into the market to stir the pot. Homes are moving rather well specifically in the lower end of it, pricewise from roughly the $200,000 mark on down.

Las Vegas new home segment, however, has been nonchalantly elbowed to the sideline during this otherwise nascent trend up. It really hasn't had much of a chance to do anything but observe and fume about its bad fortune. The simple reason is that it's not price competitive at all. Let's look at some numbers while we are at it.

New homes in November were $73,000 more expensive than existing ones, so reported SalesTraq, a Las Vegas research boutique. It's easy to see what type of a home currently dominates the sales data. Actually, this spread was a jaw-dropping $91,000 in August. It's now narrowing and obviously will give the segment a little better chance to compete.

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Home ownership sliding according to New York Fed report - Las Vegas housing taking flak

The mortgage and real estate markets are in the midst of a major overhaul on the heels of the current housing embarrassment. The home loan sector has already seen major regulatory changes, some needed and some of dubious value. And in this climate of political gamesmanship and Wall Street lobbying more is conceivably on the way to favor large financial institutions. Mortgage lenders have also tightened considerably underwriting standards to align their operations to better handle the new market realities.

The economically significant housing sector is absorbing changes unimagined just a few years ago. One of them is the fact that homeownership is on a downward slide. The recent New York Fed's study points out that homeownership crested at a respectable 69% in 2006 and now stands at 67.3%. At this point it's down only fractionally, but this meltdown still seems to have enough legs to go another year or two. Perhaps even longer. As a result it probably will sink several more percentage points.

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Real estate jam helps cure marital troubles

The housing market is a mess. The home loan industry is limping along. The economy is on an IV drip. Bernanke makes Time magazine's Man of the Year. Tiger, well, nuff said.

But there are also some goods news sprinkled in somewhere there. Here's one.

The real estate meltdown is now credited with bringing down the U.S. divorce rate. That's right. The National Marriage Project just reported that last year this important statistic dropped 4%. See, couples on the ropes in the past used to quarrel over who gets to stay in the house and how to split the accumulated equity. When money is in play, there usually is a fight. But now so many married homeowners have no equity to battle over, so they decide to hang onto the holy matrimony and sail through the storm together while holding hands. When the housing market eventually comes back - could be a long wait in some areas - they can then drop the gloves and go at it. Or they may have managed to work things out during this cooling-off period and will stay hitched after all.

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