Source: RealtyTrac Inc.
Source: RealtyTrac Inc.
Clark County foreclosures reached their lowest monthly level in four years in January, a slowdown local professionals say could signal the worst is over.
Or, it could be a fluke.
In January, only 169 homes were in some stage of foreclosure countywide, down 55.6 percent from the same month last year and down 13.8 from December, according to RealtyTrac Inc., a California-based real estate tracking company. With one out of every 991 households in some stage of foreclosure or default, Clark County had the fifth-highest rate of foreclosure out of Washington’s 39 counties. It ranked No. 3 in December.
“I’m confused, like everybody else,” said Mike Lamb, a broker with Vancouver-based Windermere. “I’ve read in the national news that a big block of foreclosures is coming. But we’re not seeing the signs of it.”
Lamb said the inventory of Clark County houses for sale continues to shrink, suggesting that fewer homeowners are struggling and fewer banks are anxious to convert repossessed homes into cash.
“There’s only 2,704 residential listings for all of Clark County,” Lamb said. “This number does not appear to be growing at all.”
But national experts predict foreclosures will soon increase across the country, mirroring patterns observed in high-foreclosure states. In Florida foreclosure activity increased by 14.3 percent in January, and the rate of foreclosure increased by 9 percent in Illinois.
“We expect the pattern to increase in the coming months,” RealtyTrac CEO Brandon Moore said in a written statement.
National foreclosure rates could also be affected by a $25 billion national foreclosure settlement, expected to provide relief in 49 states, including Washington.
The deal with five of the nation’s largest mortgage servicers — Bank of America, JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc., formerly GMAC — will bring an estimated $648 million in benefits to Washington homeowners and foreclosure victims whose mortgages are with one of the five banks.
For those who’ve already been through foreclosure, the money is expected to come in the form of compensation within the next three to six months. For homeowners who owe more on their mortgage than their house is worth, the settlement could help reduce payments and interest rates.
Moore predicted the settlement would speed up the foreclosures process, getting lenders to work with some struggling homeowners while spurring them to push others into foreclosures, after delaying proceedings last year.
The settlement could help provide closure to hundreds of Clark County homeowners, said Kevin Gillette, executive director of the Community Housing Resource Center, a Vancouver nonprofit that provides foreclosure counseling.
In many cases, the troubled homeowners Gillette counsels are so behind on payments that his best advice is to prepare for an inevitable eviction.
“The farther behind you are, the less likely it is you’re going to get any help,” Gillette said. “I think the best thing we can do is provide transition counseling.”
In some cases, Gillette advises his clients to save the money that would have been spent on a house payment.
“That way they’ll have transition money for the move,” he said.
Gillette said fewer homeowners have been signing up for the home center’s mortgage default intake classes. He expects it will take a while before Clark County sees a permanent significant drop in foreclosures. Most of the people his agency counsels are in households that have lost income as a result of job loss or reduced hours.
Many households in Clark County face similar challenges. The county’s preliminary unemployment rate was above 9.2 percent in December, a number the state expects to revise to 11.4 percent when it releases its next report.
Despite the mixed messages about whether there will again be a spike in Clark County foreclosures, even one month with fewer foreclosures could improve Clark County’s real estate market overall, said Terry Wollam, an agent with Re/Max Equity Group.
“In general, the bank-owned properties and short sales are priced below market value so they will move in an extremely short time frame,” Wollam said. “That affects the rest of the market and has a negative impact on all home values.”