Clark County foreclosures up in December, down for 2012

By Cami Joner, Columbian retail & real estate reporter

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The number of Clark County homes in delinquency and foreclosure spiked in the month of December, but for the whole year, the volume of troubled households retreated a bit from the previous year.

That's what California-based RealtyTrac reported on Wednesday. There were 2,297 homes sold as real estate owned by banks in the 12 months ending in December, down nearly 15 percent from 2,696 foreclosures in the same period the previous year. The decline in the total foreclosures was not a surprise, said Kevin Gillette, executive director of the Community Housing Resource Center in Vancouver, which offers mortgage counseling and other services to homeowners.

But Gillette was puzzled by the end-of-year jump in foreclosures. "You'd normally see that drop through the holidays," he said.

In December, there were 345 houses in some stage of foreclosure in Clark County, up from 196 during the same month in 2011 The majority of the households counted -- 266 homes -- received a notice of trustees sale, which is a written document that sets the date and time of the trustee's sale of the home. The rest of the households -- 79 houses -- represented completed sales of homes that were taken back by banks

Gillette also gave credit to a fairly new state law, the Foreclosure Fairness Act, for slowing Clark County's rate of foreclosure. The law essentially forces mortgage lenders to work with underwater and delinquent homeowners before starting the foreclosure process. He has also seen evidence that Washington's cut of a $25 billion national foreclosure settlement has helped clear the path for mortgage lenders to work with buyers to modify mortgages.

As for the 76 percent year-over-year spike in December foreclosures, Gillette just wasn't sure why the numbers increased.

He expects the area's troubled housing market to improve through 2013, as more lenders are beginning to accept short sales, in which the home can be sold for less than the amount owed on the note.

He expects to see more underwater homeowners negotiate short sales because Congress extended the Mortgage Forgiveness Debt Relief Act through 2013. Without the act, debt forgiven by a short sale could be considered passive income owed to the IRS.

"Homeowners can breathe easier now," Gillette said. "because they don't have a tax liability on the debt."