The Las Vegas area is being hit particularly hard by the subprime mortgage crisis. The highest foreclosure rate in the country is in Nevada. Foreclosure in the metro area is consistently one of the top five worse in the nation. Because of an overflow of available homes, this in turn slows the construction of new homes and inverse effect on property values. The Las Vegas foreclosure crisis jeopardizes future growth. Buying a Las Vegas foreclosure provides opportunity for more affordable housing for those who in recent years have been priced out of the Las Vegas real estate market.
The Las Vegas foreclosure crisis includes homeowners losing their houses in foreclosure after they are unable to continue to pay their mortgage payment. People with bad credit scores or finances were given risky loans, or subprime mortgages by lenders and banks, causing the foreclosures in Las Vegas. Homebuyers attracted by low interest rates soon faced adjustable rate mortgages (ARMs), payments were nearly impossible as they faced higher interest rates down the road, leading to foreclosures of Las Vegas homes. Taking advantage of uninformed or new buyers led by Predatory lenders perpetuated the situation of the valley wide Las Vegas foreclosure catastrophe. There were a high number of speculators who purchased investment homes at the peak of the real estate market and expected to flip them for a profit, only to see values decline during the Las Vegas foreclosure crisis.