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Gated Into Foreclosure

Krissy Clark

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Mike Heger getting ready to move
(Krissy Clark)
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It's no secret that much of the recent turmoil in the economy has its roots in the subprime mortgage crisis and the collapsing housing market - phrases that have grown way too familiar to the residents of Las Vegas, Nev.

The whole city has been hit hard. Property values have plummeted, and the area has one of the highest foreclosure rates in the country. Things are especially dire in the newer parts of the city and freshly built subdivisions, like the gated community of San Niccolo.

For the last several months, Weekend America's Krissy Clark has been following the folks behind the gates there. She brings us some of their stories.


There are newspapers, websites, radio and television stations you can turn to for the latest in the country's foreclosure crisis. But if you live in San Niccolo, the news might come straight to your mailbox, in a personalized letter. It might not be in the language you speak. But you'll probably get the gist. And it's hard to escape what some words mean. Like the ones in bold.

"I know enough Spanish to read 'URGENTE' and 'FORECLOSURE,'" explains a woman we'll call Veronica Smith, who is holding the contents of an envelope she received in the mail two days ago. Smith didn't want to use her real name, partly because the letter she is reading is not actually addressed to her, and of course it's against the law to read someone else's mail. Smith says she opened the envelope by accident. She was going through the stack of letters in her mailbox and opened one she quickly realized was meant for her landlord. But she'd already read enough to discover that the house her family lives in - the house she's been promptly paying rent on for the last two years - is in foreclosure. Her landlord hadn't told her.

"It was one of those bad dreams where you keep flipping over the envelope, and looking to see, 'Is there a mistake?'" Smith says. She is talking fast, almost out of breath. She looks at the letter again and moans, "I can't believe this is happening to me."

Smith has come over to her neighbor Karen Lewis's house for a little moral support while she reels at the implications of the letter.

Smith is a single mom. She recently got laid off from her job as a project manager for a company that provides retail software for department stores. Now, besides finding a new job, she'll have to find somewhere to live, and fast.

"Worst case, you can come over across the street and stay with me," Lewis offers. Still, Smith is worried that she will have to move out of the neighborhood, and then her kids might have transfer to new schools. She has just started housing two Obama campaign workers in a spare bedroom for the election. What will she tell them?

But shocked as Smith and her neighbor Lewis are by this letter, it only confirms what they already know about the subdivision they live in. A reality that is summarized neatly in the pages Smith has just printed out from a website that tracks foreclosures in Las Vegas. "Look at all of the ones on Arcata Point," Smith says, pointing to the list of foreclosures on her cul-de-sac. She counts them out. Eleven out of the 33 houses are foreclosure or pre-foreclosure.

A "perfect storm" is a cliche that gets thrown around a lot to explain the collapse of the housing market in Las Vegas and other parts of the country right now. A warm front of booming home construction and run-away real estate speculation hit a cold front of unscrupulous mortgage lending practices.

And you might say this "perfect storm" has been hovering right over the red tile roofs and desert-hued stucco of the gated community where Smith and Lewis live.

"We've seen how many families move out now?" Smith wonders, turning to her neighbor.

"Quite a few," Lewis says.

"You see the tell-tale signs," Smith goes on. "Like on garbage day, when you start seeing furniture piled up real high, that's usually a good indication. You can tell people are just pissed, throwing things out. One of the owners on the corner, they literally threw garbage on the ground, and it stayed there for two weeks solid, and then their sprinklers were coming on and it was getting wet. It was so bad."

I ask Smith and Lewis if they ever say goodbye to the neighbors before they leave, or vice versa. "No," Lewis says. "They're just gone."

San Niccolo has been feeling the effects of the real estate crisis for more than a year now. A lot of houses are vacant, post-foreclosure. Others are being rented out to college kids, or multiple families, by investors who'd hoped to flip the properties for a quick profit but couldn't find buyers.

Houses that went for $600,000 a few years ago are now on the market for half that. And the neighbors say the wrought-iron front gate, supposed to symbolize prestige and security, is regularly rammed by tow trucks trying to get in to repossess residents' cars. Vandalism has become a problem in the neighborhood: break-ins, slashed tires, broken windshields.

A few months back, this all worried Smith and Lewis. Now?

"It becomes comical," Smith says. "This is completely laughable. We used to get upset about this. We were a bit appalled and taken aback. We were such good neighbors. And now it's like, 'Oh, whatever.'"


Lewis's four-year-old son Cooper likes to go on walks with his mom around their neighborhood, and I go with them to see what's happened to San Niccolo since I was here last spring.

Some things have gotten better: The banks have sold a few of the properties they'd foreclosed, so some of the dry lawns we saw last spring have new grass, and new owners.

But the foreclosures keep coming. Now, there is a new batch of houses with signs in front that say "bank-owned." And walking around the neighborhood, Cooper is starting to learn words that are not on your typical pre-K vocabulary list. He can more or less define the word "foreclosure."

"Not living in a house," he says. His mom is surprised. "I didn't realize you knew that," she says, looking at him. "I guess when the mommies talk, they do listen."

We pass a house a little further down the street. Lewis is surprised to see that it looks vacant. She sees a guy getting out of a pool maintenance truck in the driveway, and asks him.

"Is this house… do you know what happened to the people here?" she asks.

"They moved," he says. "It's in foreclosure right now."

"It is?" Lewis says. "Oh, jeez."

That's another thing about San Niccolo these days. There is so much turnover that the people who know the place best aren't the residents, but those who serve them. The pool guys, the landscapers, the door-to-door car detailers.


When I first flew into Las Vegas, as I was driving out from the rental car place, I saw hand-written signs advertising a phone number to call if you wanted to buy foreclosed houses.

"Hello, and thank you for calling the Foreclosure Hotline!" is how the recording begins when you call the number. The enthusiastic thanks is coming from Alessandro Chiocchetti, a real estate agent and the man behind the Las Vegas Foreclosure Hotline.

"Did you know that nowadays you can buy a house for about 40 percent less than what it was going for just one year ago?" the recording continues. Chiocchetti has put up signs for his service all over Las Vegas. "That's called Italian creativity," he says.

In the soft housing market, it's been hard for realtors like Chiocchetti to make a living. But he's adapted. He's become a specialist in helping clients jump through the many, many hoops involved in buying a bank-owned house. He says half his customers come from outside the U.S. "I have many Canadians. The Canadian dollar is very strong, and honestly they find our prices quite ridiculous."

Chiocchetti drives me around San Niccolo, to give me a buyer's eye view of the neighborhood. "It can be dangerous when you go and show a vacant home," he says, and explains that foreclosed homes aren't for everyone. It takes a special buyer who can stomach the poor condition the places are often in. Many times, the homes have clearly been broken into and stripped. "They try to steal appliances, granite counter tops, whatever is left," Chiocchetti says. "Homeless people, they spend the night over there."

Chiocchetti takes me to the house of Mike Heger. When we ring the doorbell, a little boy - Heger's grandson - opens the door. He looks at us and yells, "They're here to take away our house!" Heger comes to the door and apologizes. He explains that things are a little chaotic. They're in the middle of packing up their house. The Hegers are moving out this weekend.

Boxes are stacked in their foyer. And in the front yard there's a pile of books, pots, old magazines, a pair of slippers. "Just stuff," Heger says, looking down at it with weary eyes. "All the various things we've accumulated through the years."

Heger's house is about to be foreclosed. He says he had to stop making payments about a year ago, when his own real estate business went under. To avoid completely ruining his credit history, he has worked out a deal with the bank to let him short sell the place. That means before the bank takes ownership of the house, he is trying to sell it at a loss. Heger says he got three genuine offers this week, for almost $300,000 less than he paid for the house three years ago. But these offers are still ones that the bank will consider.

He is hoping one will go through. But just in case, he and his family are moving into a rental unit across town this weekend, while their credit is still good enough to get a landlord to lease to them.

"It's a smaller house," he says. "But you know, hey, it's all about having family together. You know, just keep family together."

I ask him how the rest of his family is taking the move. "They're fine," he says, a little unconvincingly. "We tell them hey, you can either look at the bad things or look at the good things."

I ask him what are the good things for him now.

"Tomorrow's another day," he says. "Tomorrow's another day, and I'm very thankful for the time I had in this house." He pauses. "Just don't get cynical over it, you know?"

Mike is moving on. He would say goodbye to his neighbors, but most of them are already gone. Others, like Veronica, the woman who's landlord is being foreclosed on, will be out of the neighborhood soon enough.

The thing that's striking about Veronica, and Mike, and a lot of the people I talked to here, is that as they describe their situations, they are not altogether out of hope. They can even find moments for laughter. Or at least a half a smile, along with a shake of the head.


For more information on the Las Vegas Foreclosure Hotline, call 1-888-604-2140.


  • Comment | Refresh

  • By john vincent

    From charlotte, NC, 09/27/2008

    Through their greed and stupidity these people are just as responsible for the financial disaster now unfolding in our nation as the Wall Street fat cats. I do not feel remotely sorry for them, their kids yes, but not them. I hope they are suffering, it is the only way they will learn a much needed lesson in fiscal responsibility.

    By Rob Lederman

    From Madrid Spain, ON, 09/27/2008

    I've been reading this stories for a year and wonder why the family simply can't "move" back in and live for free. There's so many empty house will anyone notice or cae?

    In a few months the homeless will be living there might as well be a family.

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