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Nevada’s housing crisis leaves Obama vulnerable

By Michael A. Fletcher,July 20, 2012

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When they turned to the equity in their new home for help, they discovered that it had vanished, as the value of the house had declined to $125,000. Before long, they were juggling their house note, too, and now they are six months behind.

They have worked closely with their lender to have their loan modified. Recently, they were offered new terms that would lower their $954 monthly payment by $58 — not nearly enough to provide real relief.

“I know I should probably be grateful, but it feels like a slap in the face. A modification is supposed to help,” Amy said, “but what good is $58 a month?”

Plummeting home values

Although Watt is upset with Obama for not doing more to help underwater homeowners, Romney has advocated reducing government’s role in helping them. Romney says the various programs Obama has offered to keep underwater homeowners in their houses have only delayed the inevitable wave of foreclosures that he said would allow the housing market to find a new equilibrium.

“That comment was kind of like a stick in the eye,” said Barbara Buckley, a former Democratic speaker of the Nevada Assembly and executive director of the Legal Aid Center of Southern Nevada. “People here are hard working; they are not slackers.”

Still, Buckley acknowledged that the long line of programs Obama has implemented has not had the desired effect.

In recent months, foreclosures in the state have slowed, which experts call a temporary break while banks adjust to the shifting legal landscape for foreclosures. But the fundamental problem — that so many people have lost so much value in their homes — remains.

In recent months, there has been slight improvement in the Nevada economy. Tourism and gaming revenue are up and unemployment is down — to 11.6 percent.

It is the kind of uptick that no one confuses with a recovery.

Eddie Eder, 31, a father of two, said he has been out of work for four years. Before the housing market imploded, he said he made $1,500 a week as a heavy equipment operator for a firm that built in-ground swimming pools.

“People can’t afford pools these days,” Eder said. “Heck, they can barely pay rent.”

Back then, he paid cash for a $38,000 truck. He bought his son baseball bats that cost hundreds of dollars, and never worried about money. Now money is all he thinks about, as he whiles away his days watching his two-year-old daughter while his wife, Amanda Hulsizer, goes to work.

“I used to feel like a high roller. Now I’m Mr. Mom,” he said. “Sometimes, I’m embarrassed by that.”

Last October, Obama visited Eder’s block of tan stucco homes to deliver news of his plans to make it easier for underwater homeowners to refinance their mortgages. Home refinancing applications in Nevada have more than tripled since then.

Yet Eder is unimpressed, even though he gives the president credit for trying and says he will vote for Obama in the fall.

He said housing values in his Bonita Hills neighborhood have cratered, leaving everybody he knows strapped. Homes that sold for over $200,000 when they were new in 2004 shot up to nearly $300,000 by 2006. Now, they are worth well under $100,000.

Asked what has changed since the president’s visit, Eder cracked a wry smile before answering: “Housing values have gone down another $8,000.”

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