Las Vegas real estate, mortgage, appraisal blog

Everyone these days seems to be crying recession. With increasing stories of foreclosures and jobs being lost it is often a surprise when you hear that some professions are actually improving.

Las Vegas Sun reported that production in Nevada mines has gone up, producing $5.4 billion worth of gold silver and other minerals last year, a record.

Gold prices have been surging since late last year as the weak dollar, record crude-oil prices and fears of a U.S. recession have enhanced its appeal as a haven for investors.

Several precious metals analysts have predicted $2,000 gold ahead as a global commodities boom pushes the price of raw materials further into record territory.

Nevada is the nation's top gold-producing state, accounting for more than three-quarters of gold production. Nevada accounted for 8 percent of the total world gold production, behind China, South Africa and Australia.

Copper production in the state during 2007 was 142.8 million pounds, with a calculated value of $461 million, based on an average price of $3.23 per pound. Silver production fell slightly to 8.4 million ounces from the 2006 production level of 8.5 million ounces, but the value of production rose to $113 million from $98 million in 2006 based on an average silver price in 2007 of $13.38 per ounce.

Industrial mineral production increased slightly in 2007. The total value of Nevada's industrial minerals, which include aggregates, barite, clays, diatomite, dolomite, gypsum, lime and limestone, lithium compounds, magnesium compounds, mercury, molybdenite, opals, perlite, salt, silica sand, and turquoise, was about $610 million, up from about $592 million in 2006.

"This increase in the value of all mined commodities indicates Nevada's mining companies continue to make a significant and growing contribution to the state's economy," Gov. Jim Gibbons stated.

In a recent article in the Las Vegas Business Press Territory Inc. is seeing the kind of potential in Las Vegas that its denizens would readily agree with. They are building almost $111 million in shopping centers this year. Despite worries of an economic downturn Territory Inc. is optimistic.

"All of our existing centers are stabilized and doing very well," Territory Chief Executive Officer Terri Sturm said. "If you have a sound project that is well located and well anchored, those centers are still doing business. We aren't seeing a lot of vacancies."

And this years expansion isn't all they're looking at:

"We have another 100 to 150 acres throughout the valley that has yet to be developed," Sturm said. "We haven't decided what to do with it yet."

Territory owns everything it builds and also handles all of its own leasing and property management. Their turnkey approach ensures that the center maintains its value for years to come.

"There is a different frame of mind when you come from the landlord's perspective," Sturm said. "We hold all of our centers for the long term, so quality is important. It's important for us have the right mix of tenants as opposed to just filling space. We want our tenants to feel that's a long-term relationship."

In a letter dated April 30, 2008 eight major mortgage lenders sent a letter expressing their concerns over the inconsistencies and at times confusing issues that the HVCC has laid out as their plan to combat fraud. These lenders are now claiming that the plan is violating the Administrative Procedure Act as well as affect many more provisions and standards already in place.

The Agreement would deprive the most dynamic sector of the appraisal services market of a vital source of capital. Investments by lenders and by diversified service providers have facilitated the development of new valuation products and technology that allows real estate to be valued more accurately and efficiently. They also allow appraisal service companies to guarantee – with real capital – the integrity of the appraisal, which is not feasible for an individual appraiser. Thus, prohibiting such investments does not advance OFHEO’s goal of enhancing the safety and soundness of the GSEs.

Forcing the dismissal of thousands of highly-skilled appraisal professionals because they are employed by lenders or appraisal management companies would be irresponsible at a time when there is a critical need for their services. These and other provisions of the Code would impose a structural solution when there is little or no evidence of a structural problem, while failing to address real problems in the industry such as the lack of effective state regulation of appraisals in loans that are not purchased by the GSEs and are not subject to the FIRREA provisions on federally related transactions.

The letter finishes with the following statement after discussing all of the reasons the HVCC is not only a poor choice but will not solve the problems it purports to but will instead only cause more:

Because the adoption of the Agreement has grave procedural defects, is inconsistent with the interests of the housing market and other aspects of sound public policy, we urge OFHEO to withdraw its assent to the Agreement, to not permit the GSEs to implement the Agreement, and take steps to assure that this type of rulemaking by settlement does not occur in the future.

April 10th the Foreclosure Prevention Act of 2008 (H.R. 3221) was passed by the Senate. It has been a long battle for this Act to be passed as there is criticism from quite a few different sources.

This Act will give people who buy foreclosed homes a $7000 tax credit. Its aim is to help get people back into foreclosed homes and get home values back up again. The person buying the home would get the tax credit over two years (half the first and half the second) and MUST live in the home as a primary residence for both years.

NuWire Investor explained what some of the negative effects could be as well:

But the foreclosure tax credit has a couple of potential snags. Some experts argue that making foreclosures easier to sell may result in lenders that are quick to foreclose and unwilling to negotiate terms with homeowners in default, according to The Associated Press. If this is the case, such a measure could actually increase the number of foreclosures on the market.

Additionally, “economists say the $7,000 credit could distort the market by making foreclosed homes owned by lenders more attractive to buy than other homes. That has the effect of lowering the value of homes occupied by people who are up to date with their mortgages,” according to The AP. Press.

Further, it is considered by some a method of bailing out lenders, who will be able to offer their foreclosure properties with the tax credit as an incentive.

In a Statement of Administration Policy (SAP), the Bush Administration stated that the president’s senior advisors will recommend he veto H.R. 3221 if it reaches his desk. The Administration opposes the appropriation of $4 billion to assist state and local governments to redevelop abandoned and foreclosed homes, as it believes the program would help lenders and speculators more than individual homeowners, according to the SAP. The Administration also said it opposes modifying bankruptcy codes, stating that such alterations would likely prolong the real estate market’s recovery process.

Now that the Act has passed both House and Senate it will need to go to a committee of both House and Senate members so that they can work out differences between the versions of the bill that were approved by each chamber. It will then go on to President Bush for approval.