for the past three years, nevada has had the nation’s highest foreclosure
rate. and little in reno, nev., appears primed to push it down.
Although home sales in the Reno-Sparks metropolitan area jumped 51 percent between
August 2008 and this past August, the median home price for the area declined 28 per-
cent in the same period. Why? Six out of every 10 sales were bank-owned or short sales,
according to the Reno/Sparks Association of Realtors. Realty Trac also reports that one
out of every 37 housing units received a foreclosure notice in the third quarter in the
Compounding matters, Reno’s unemployment rate reached 12 percent this past August,
fueled by constriction in the casino, hospitality and construction industries.
Brian Bonnenfant, project manager at the Center for Regional Studies at the Univer-
sity of Nevada, Reno, told the Reno Gazette-Journal in September that he expects more
homeowners to ditch their negative equity and enter voluntary foreclosure.
To spur purchases in devalued areas such as Reno, Nevada’s housing division this past
October moved forward with plans to lend $125 million to first-time lower-income buy-
ers statewide. State leaders expect to finance 850 Nevada homes through the bond-
What the Locals Say
“More than 90 percent of my business involves purchases, and consistently 90
percent of these transactions are either short sales or foreclosures. Homes in the
$100,000-to-$175,000 range are flying off the shelves, most of which are bank-owned and attracting multiple bids. In my opinion, if you’re not in the purchase
business, you’re not in business.”
▲ Population: 217,016
• Population in 2000: 180,480
• Rank (U.S.): 93rd
• Metropolitan-area population: 414,784
• Metropolitan-area rank: 116th
▲ Average commute: 18. 9 minutes
• Average commute in 2000: 17. 9 minutes
• U.S: 25. 3 minutes
▲ Median household income: $51,447
• Median household income in 2000: $40,530
• U.S.: $50,740
▲ Median age: 35. 4 years
• Median age in 2000: 34. 5 years
• U.S.: 36. 7 years
▲ Unemployment: 12 percent
• Unemployment in August 2008: 6. 6 percent
• U.S.: 9. 7 percent
• Licensing: Nevada isn’t yet a part of the Nationwide
Mortgage Licensing System. The Nevada Department
of Business and Industry Mortgage Lending Division
( mld.nv.gov) oversees licensing and enforcement.
• Number of broker companies:
• Reno: 43
• Nevada: 314
• State association: Nevada Association of Mortgage
• Online: namp.us
• Demographics: 81 percent white, 7 percent Asian,
3 percent black, 9 percent other; 24 percent identify
as Hispanic or Latino
• Largest private employers: International Game Technology; Renown Regional Medical Center; Peppermill
Hotel Casino, Reno; Silver Legacy Resort Casino;
Wal-Mart Stores Inc.
▲ Median monthly housing costs: $1,905
• Median monthly costs in 2000: $1,290
• U.S.: $1,464
▲ Foreclosure filings (MSA, third quarter): 4,787
• Filings in third quarter 2008: 2,653
▲ Foreclosure rate (MSA, third quarter):
1 per 37 households
• Foreclosure rate in third quarter 2008:
1 per 66 households
Foreclosure rank (state, third quarter): 1st
• State rank in third quarter 2008: 1st
▲ MSA foreclosure-rate rank (third quarter):
9th (out of top 203 MSAs)
• Rank among MSAs in third quarter 2008:
20th (of of 230)
▲ Homeowner-vacancy rate: 6. 3 percent
• Vacancy rate in 2000: 2.2 percent
▼ Median home price (single-family): $180,000
• Median home price in August 2008: $250,000
• U. S.: $177,500
▲ Total home sales: 476
• Total home sales in August 2008: 316
▼ Average conforming purchase-loan size (July):
• Average size in July 2008: $230,417
• U.S.: $194,969
▲ Average conforming refinance-loan size (July):
• Average refi size in July 2008: $175,840
• U. S.: $171,109
▲ Housing units: 98,237
• Housing units in 2000: 79,453
▼ Single-family residential building permits: 37
• Permits in August 2008: 58
▲ Federal Housing Administration volume (July):
• Volume in July 2008: 128 loans
Frank Garay and Brian Stevens Co-hosts “tBWs Daily”
BY DARRICK MENEKEN
Frank Garay and Brian Stevens host ThinkBig WorkSmall’s
popular “TBWS Daily,” an online video report dispensing mortgage news and opinion to viewers nationwide
at thinkbigworksmall.com. Earlier this year, they led a
charge to gain more than 115,000 signatures on a petition to reverse the Home Valuation Code of Conduct
(HVCC). We caught up with the duo — who have a combined 37 years’ mortgage-industry experience as brokers and net-branch operators — to gauge their thoughts
What worries do you have about efforts to stimulate the
garay: Qualified buyers are being left in the cold.
Where do their difficulties stem from?
stevens: Lenders are tightening their guidelines. They’re
taking Fannie Mae and Freddie Mac guidelines, they’re
taking Federal Housing Administration (FHA) guidelines and they’re layering conditions on top of those.
A couple of years ago, it seemed like lenders looked for
reasons to fund loans. Right now, it seems like they’re
looking for reasons to decline loans.
FHA seems to be propping up the market. How important is FHA to mortgage brokers today?
garay: It’s critical. Let’s face it, it’s all about the cash
to get into the property, and FHA remains a 3.5-percent
stevens: It will continue to be an FHA world. Mortgage
insurance on Fannie and Freddie products is prohibitive
for your average borrower.
Beginning Jan. 1, FHA will prohibit broker-ordered
appraisals. As opponents of HVCC, how do you feel
garay: It seems to me like FHA just wants to get unfair
influence of appraisers out of the picture. They still
want to make sure that appraisers are paid appropriately and make appraisals portable. Quite honestly, we
have no problem with that. We completely understand
that an appraiser shouldn’t be influenced by the person
ordering the appraisal, but HVCC completely missed the
So what do you find most encouraging about today’s
market and the upcoming year?
stevens: People are still getting loans, and they’re getting 30-year, fixed-rate loans at rates that were being
sold on 3/1 ARMs just a few years ago. Loans are harder
to get. But the loans that people can get — if they don’t
mind the difficulties getting them — they’ll never have
garay: What I think is encouraging is the fact that the
people in the mortgage-brokerage industry who have
taken it seriously from the beginning as a career choice,
most of those people are still here, and they’re going to
stick around. I think we’re going to have a lot of really
professional people handling these loans in the future.
I think we’re going to see a lot of small mortgage brokerages get absorbed by larger mortgage brokerages.
But I believe brokers are here to stay.
Darrick Meneken is an associate editor at Scotsman Guide.
Reach him at (800) 297-6061 or firstname.lastname@example.org.