Foreclosures surge in the Seattle area and Washington state
Even as home prices have been rising in the Seattle metro area, more people are losing their homes to foreclosure.
The number of people in the Seattle-Tacoma-Bellevue metro area who lost their homes to foreclosure in March jumped 67 percent from a year ago. Statewide, the number was even higher – 88 percent. That's according to new numbers from RealtyTrac, the foreclosure-data company.
Bruce Neas is a lawyer with Columbia Legal Services in Olympia who works on housing issues. He says he expected this increase because banks slowed down foreclosures while they were being sued by the states for the robo-signing scandal. That case settled last year and now he says banks are pushing ahead with foreclosures.
"It’s going to take a couple of quarters to see whether this is going to even out," Neas said. "I would suspect it’s going to stay high for a while – for at least a year to two years and then hopefully start dropping again."
Neas says it’s hard to know how much the uncertain economy is contributing to the rising number of foreclosures.
And even as the economy gets better, people who have slipped behind on their mortgages may have a hard time saving their homes, says Marc Cote, who heads the Washington Homeownership Resource Center, which runs the statewide foreclosure hotline.
"If you can't afford to reinstate the loan, you still have to be able to work out some solution with the lender," Cote said. "Even though the economy is picking up, (if) you're already behind on your mortgage, how do you fix that problem?"
Cote says one bright spot is the state law requiring banks to offer mediation to homeowners in foreclosure. He says 80 percent of the mediations done by the housing agency he heads, Parkview Services, have allowed the borrower to stay in the home.
Washington had the ninth highest foreclosure rate in the country in March. The states with the highest rates were Nevada, Florida and Illinois.
The rising number of bank repossessions is good news for one group of people – homebuyers. A scarce supply of homes on the market has been pushing prices higher. In King County, there’s only a one-month supply of homes for sale – usually four to six months' supply is considered normal.