The number of available homes has plunged in Las Vegas after a sweeping state law subjected lenders to stiff new foreclosure rules and penalties, the Wall Street Journal reported today. With banks exercising caution, many homeowners—including those seriously delinquent on their loans—have been allowed to remain in place. As a result, there is little on the market at a time when first-time buyers and real estate speculators are anxious to tap both cheap prices and low-interest mortgages. Many real-estate agents, home builders and consumer advocates argue that the law, intended to remedy foreclosure-processing abuses, has backfired. Some owners who are behind on payments aren't maintaining their homes as banks refrain from eviction proceedings. The perverse outcome: Inventory shortages have spurred new developments despite a glut of properties stuck in foreclosure limbo.
