Settlement offers help for Nevadans who faced foreclosures

Las Vegas, NV (KTNV) -- Las Vegas is one of the hardest-hit areas in the country when it comes to foreclosures, and residents are wondering how the new national settlement may help them.

There are still many questions regarding how the payout will reach those who need it most, and some worry that it's already too late.

"I went to home modification twice," James Miller, a Las Vegas resident who lost his battle with the banks, said. "And they say, 'we'll see what we can do about it.' Nothing happened."

Miller said he paid cash for his house, but was advised to take out a loan for $182,000. He couldn't keep up with the payments, and despite trying to work with Bank of America, he says they took over his home in August of 2011.

"It was our home," Miller said. "My wife was so aggravated, she had a stroke and died. That's not going to bring her back, nothing will bring her back, but I'd like to get my home back."

The government announced a $25 billion deal reached between 49 states and the nation's five largest banks on Thursday.

Those lenders were accused by the government of a long list of abuses- among them, robo-signing. Under this deal, about 1 million homeowners under water with their mortgages will have their debt reduced by lenders or be able to refinance at lower rates.

Another 750,000 Americans who lost their homes in the last three years will get a check for about $2,000.

Unsure on whether he qualifies for help in this settlement, Miller said he intends to find out.

"I'm 80 years old, and I got nowhere else to turn," he said.

Critics say the settlement will only help a small fraction of the millions of homeowners who are drowning under their mortgages, and it won't move anyone back into the home they lost to foreclosure.

The state Attorney General said Nevada will receive about $1.3 billion in benefits from loan modifications and other relief.

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Low Inflation is Making Mortgage Rates Better

After rising for two weeks, mortgage rates moved a little lower this week. Slower than average economic growth and low inflation persuaded investors to purchase bonds, including mortgage-backed securities. Following three months of declines, mortgage rates appear to be settling into a range so far in September.

The most significant economic data released during the week was the monthly inflation reports. Rising inflation erodes the value of bonds and pushes mortgage rates higher. In the current economic environment, higher inflation is not a concern, and some investors are more worried about the risk of inflation falling too low. The Fed is generally most comfortable when core inflation is rising at an annual rate between 1.0% and 2.0%. In August, the core Consumer Price Index (CPI) increased at a low 0.9% annual rate. While this level is probably not low enough to prompt new action from the Fed, investors will be closely watching what the Fed has to say about inflation rates at next Tuesday's meeting.

Hearings began this week on the role of government in the housing market, including the future of Fannie Mae and Freddie Mac. The debate is expected to be lengthy, and the Obama administration has stated that it will produce a proposal in January. There is general agreement that government involvement has created a more liquid market for mortgages, which has resulted in lower mortgage rates. The early consensus is that there is an appropriate role for government in the housing market, but that proper safeguards must be established to reduce the future risk to taxpayers. In any case, changes are expected to be phased in gradually over a period of years.