Las Vegas Sun: Study confirms role of home flippers in Nevada housing price collapse

Blogging from Las Vegas.

The New York Federal Reserve released a report that confirms pretty much what we all knew--home flippers played a big role in creating the housing bubble.

Nevada of course was hit very hard by the crash.

From the Las Vegas Sun:

Keeping in mind that when home prices fall investors are more likely to default on mortgages than are owner-occupants, the Fed report found:

• At the peak of the boom in 2006 and 2007, about 35 percent of U.S. new-purchase mortgage loan dollars were going to people who already owned at least one house. In Nevada and the three other hard-hit states, that percentage was about 45 – up from about 25 percent in 2000.

• Investors owning three or more properties were responsible for 20 percent of loan originations in 2006 in Nevada and the three other hard-hit states, almost triple their share in 2000.

• Investors nationwide were more likely than owner-occupants to have received nonprime loans, or loans with low down payments and high interest rates. About 25 percent of such borrowing nationwide at the end of 2006 involved borrowers with three or more properties vs. 35 percent in Nevada and the three other hard-hit states.

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