Snohomish County no longer seems immune from the wave of foreclosures that have affected homeowners nationwide, as the number of filings last month rose 39 percent compared with a year ago.
Across Washington, foreclosures rose by 64 percent last month, while the growth in filings across the nation was only 27 percent, according to RealtyTrac Inc. That national number was significantly lower than in previous months.
“There were some areas that were insulated a little bit before that are now catching up,” said Daren Blomquist, spokesman for RealtyTrac.
In Snohomish County, RealtyTrac reported one foreclosure filing for every 805 households, up from one filing for every 856 homes in July.
That equals about half of the national rate of one filing for every 416 households. That’s an important number to keep in mind, said Jason Bloom, chairman of Elliott Bay Mortgage and president of the Edmonds-based Washington Association of Mortgage Professionals.
“Whenever you see increases in defaults and foreclosures, there’s reason for concern,” Bloom said. “We’re still in a better position than most other markets in the country.”
In Nevada, which still has the most foreclosures per household, the rate is one for every 91 households. California, Arizona and Florida were not far behind. Those states account for more than half of the foreclosures nationwide.
Overall, 303,800 homes received at least one foreclosure-related notice in August, RealtyTrac said.
That put the total number of foreclosure filings at its the highest level since it began issuing reports in 2005. The Irvine, Calif.-based firm monitors default notices, auction sale notices and bank repossessions.
The Puget Sound area, and Washington in general, have been spared the full effect of the mortgage crisis for two main reasons, Bloom said. First of all, relatively few — about 10 percent — of the mortgages here in recent years were subprime loans, which are the most at risk for foreclosure.
Also, real estate values have not slipped as dramatically as they have in states in the southwest and the upper Midwest. In Snohomish County, the median price for houses was $339,950 last month, a 9.35 percent drop from a year ago, according to the Northwest Multiple Listing service. In some areas of the nation, value have slipped by 50 percent or more.
Weak sales, sinking home values, tighter home loan lending practices and a slowing U.S. economy hamstrung by high fuel prices has left some homeowners with few options to avoid foreclosure. Many can’t find buyers or owe more than their home is worth. An estimated 2.8 million U.S. households will face foreclosure, turn over their homes to their lender or sell the properties for less than their mortgage’s value by the end of next year, predicts Moody’s Economy.com.
Four Democratic senators on Thursday urged the mortgage companies Fannie Mae and Freddie Mac to freeze foreclosures for 90 days on loans they hold. The troubled companies, seized by the government Sunday, should help struggling borrowers swap their mortgages for more affordable loans and stay in their homes, the lawmakers said.
The next six months will be critical in terms of the housing crisis, noted Albert Saiz, assistant real estate professor at Wharton School of Business. But the slow economy, high unemployment and volatile financial markets present obstacles to improvement in the foreclosure situation, he said.
So, how much longer will foreclosure rates keep going up? Bloom said he’s talked to big national banks that are seeing a leveling out of homeowners in trouble. And unless home values drop significantly more here, Bloom doesn’t foresee a huge wave of new foreclosures hitting Washington.
“In those geographical areas where they’re still predicting big declines in values, though, we’ll continue to see elevated foreclosures,” he said.
The Associated Press contributed to this story.
Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.
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