Distressed Clark County homeowners have not been as lucky in avoiding foreclosure over the past five months, according to local housing experts and national data released on Thursday.
"What we're seeing is banks moving quicker than ever before" to foreclose on delinquent properties, said Kevin Gillette, executive director of the Community Housing Resource Center in Vancouver, one of the area's only centers that offers counseling certified by the U.S. Department of Housing and Urban Development.
While the HUD-certified counseling is mandatory for homeowners who've fallen behind, Gillette said lenders are taking less time to send notices of delinquency, causing the appointment books to fill up at the nonprofit center. The center is now booking foreclosure counseling appointments one month in advance.
"We can hardly handle what's coming through the door," Gillette said.
In turn, Clark County foreclosures have registered year-over-year increases each month since November. In March, the number of local homes in some stage of foreclosure increased 21 percent to 259, compared with the same period last year, according to California-based RealtyTrac Inc. With one in every 642 homes affected, the county's foreclosure rate continued to be among the state's worst, at seventh-highest among all of Washington's 39 counties. Mason, Pierce, Thurston, Spokane, Skagit and Snohomish counties were worse off.
Gillette said mortgage lenders now send out the 30-day notices after homeowners miss between four and five months worth of payments, whereas before, it took an average of between eight months to one year. The delinquency notice lets borrowers know they have 30 days to modify the loan or make other arrangements, he said.
"It's a lot quicker than in the past," he said, estimating that the quicker turn-around time and Clark County's still-weakened economy are both factors contributing to rising foreclosures.
"We've still got an unemployment problem here, and those who are getting back to work are making less than they used to," Gillette said.
Washington had the ninth-highest rate of foreclosure in the U.S. in March, an 88 percent annual increase, with one in every 220 homes in some stage of foreclosure, bucking the national trend of falling foreclosures. Nationally, one in 296 was threatened by foreclosure in March, RealtyTrac reported.
Gillette said he could not explain why foreclosures decreased nationally in March, dropping 1 percent from the previous month and falling 23 percent from March 2012.
But, he deduced, Clark County's and Washington's foreclosures may have risen due to prevention efforts that have worn off. Those include the state's Foreclosure Fairness Act, which became effective in July 2011. The measure of adding one more step to the process helped slow Washington's and Clark County's rate of foreclosure, said Gillette. His nonprofit agency counseled more than 1,500 clients last year and expects to see at least 1,600 this year.
He said the new law essentially forced mortgage lenders to work with underwater and delinquent homeowners before starting foreclosure. This delayed the pace of homes entering the process.
Now, Clark County is among several pockets throughout the country where foreclosures are still inching higher, according to a statement issued by RealtyTrac.
Twelve states, including Washington, saw annual increases in foreclosure starts in March. The lull of previous months, which materialized in lower foreclosure rates for areas like Clark County, also seemed to coincide with negotiations between multiple state attorneys general and several major banks charged with improper document processing in the "robo-signing" scandal, Gillette said.
Attorneys general from 49 states struck a $25 billion settlement from the nation's five largest mortgage servicers: Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc. The settlement included $648 million in assistance for troubled Washington homeowners.
With the court battle now in the rearview mirror, Gillette predicted banks would speed up the foreclosure process in Clark County at least through the year. But Gillette said he couldn't predict when annual foreclosure increases might taper off, although the counseling center rarely sees troubled clients who are over their heads with subprime mortgages.
"That's all weeded out now," he said. "What we are seeing now are people who bought at the high end of the market and didn't do anything wrong, but they are extremely under water."