Federal protections, combined with a white-hot housing market, have kept a lid on foreclosures in Washington.
Even so, counselors who try to help homeowners avoid foreclosure say they’re gearing up for a spike in need later this year.
Washington ranked 42nd among the 50 states for the rate of foreclosures in the first quarter of this year, according to data released last week by ATTOM Data Solutions. One homeowner was foreclosed on for every 10,086 households in the state, compared to one in every 1,705 in Delaware, the state with the highest rate of foreclosures.
Nationally, foreclosures have dropped dramatically since the start of the pandemic, in large part due to moratoriums on certain foreclosures. Rates are starting to tick back up, likely due to some states beginning to allow foreclosures on vacant and abandoned properties, said Rick Sharga, executive vice president of marketing at RealtyTrac, a subsidiary of ATTOM Data Solutions.
Washington’s foreclosure numbers were low even before the pandemic, he said.
“The economy in the state has been strong. … The demand for housing has been higher than the available supply, especially in the Seattle metro area. That tends to keep the numbers down,” Sharga said. The state also has strong consumer-protection laws, he said.
Across Western Washington, home shoppers are eager to buy, but inventory is slim, creating a seller’s market where a Seattle-area homeowner at risk of foreclosure may be able to sell their house and walk away with a profit. That’s a stark difference from the Great Recession, when homeowners were under water.
Even so, “most people want to stay in their houses,” said Marc Cote, executive director of Parkview Services, a Shoreline-based nonprofit that provides housing counseling for people in danger of losing their homes. “It’s wrong to think the market is hot so we don’t have to worry. No. These are people’s lives, and they’re devastated.”
During the pandemic, struggling homeowners have been able to enter forbearance, allowing them to pause mortgage payments.
Nationally, about 5 percent of loans are in forbearance, according to the Mortgage Bankers Association.
In Washington, estimates vary on the share of delinquent loans, including those in forbearance, ranging from 3.5 percent to about 5 percent, according to CoreLogic and the Mortgage Bankers Association. A U.S. Census Bureau survey estimates about 5 percent of households are not caught up on their mortgage payments, amounting to nearly 111,000 households across the state.
