Everett, Wash.
Published: Thursday, August 14, 2008

Local foreclosure rate low but rising

Homes lost to foreclosure in Snohomish County rose by 44 percent compared to a year ago, but the rate is lower than seen nationally.

Herald Staff and Associated Press

 The number of foreclosure filings in Snohomish County grew by 44 percent last month compared with a year ago, as trouble in the housing market continued to spread.

With one filing for every 856 households in the county, however, local foreclosure activity remains low compared with the rest of the nation, according to RealtyTrac Inc.

Nationally, one in every 464 households received a foreclosure filing during July, RealtyTrac reported. That was up by 55 percent compared with a year ago.

James Saccacio, the firm's chief executive officer, said more than 77,000 properties across the U.S. were repossessed by lenders during July.

Foreclosure filings increased from 2007 in all but eight states. Nevada, California, Florida, Arizona, Ohio, Georgia and Michigan had the highest foreclosure rates; Washington state's rate of one filing for every 977 households ranked 26th.

Snohomish County's rate was the seventh highest among the state's three dozen counties. King County, with one filing for every 1,125 households, ranked 11th. Clark County, in southwest Washington, ranked first.

In Island County, foreclosure filings grew by a whopping 2,200 percent compared with July 2007. But the overall rate was still low -- just one filing for every 1,575 households.

The combination of weak housing sales, falling home values, tighter mortgage lending criteria and a slowing U.S. economy has left financially strapped homeowners with few options for avoiding foreclosure. Many can't find buyers or owe more than their home is worth and can't refinance into an affordable loan.

As foreclosures soar, banks and mortgage investors are also facing a pileup of foreclosed properties on their books and are cutting prices dramatically.

RealtyTrac noted that it had more than 750,000 foreclosed homes in its database of properties for sale, equal to about 17 percent of the 4.5 million U.S. homes that were up for sale in June.

To speed up the disposition of the 54,000 foreclosed properties it owns, Fannie Mae is opening offices in California and Florida and is considering selling those properties in bulk to investors. "I do not think this is a time to be holding onto (foreclosed properties) hoping for a better day," Chief Executive Daniel Mudd said last week.

It remains to be seen how much the government's intervention will stem the housing crisis. President Bush last month signed sweeping housing legislation that aims to prevent foreclosures by allowing homeowners to swap their mortgages for more affordable loans, but only if their lender agrees to take a loss on the initial loan.

The bill is projected to help about 400,000 households.

The number of foreclosures "could start to stabilize as early as the first quarter of next year if the government program gains any traction," said Rick Sharga, RealtyTrac's vice president for marketing. "That's really the unknowable right now."

In the RealtyTrac report, the Cape Coral-Fort Myers area in Florida was the metro area with the highest rate of foreclosure, followed by three California cities: Merced, Stockton and Modesto. Las Vegas ranked fifth.
© 2009The Daily Herald Co., Everett, WA