Lenders repossessed fewer homes in May
Fewer homes got foreclosure notices last month in Washington and across the country.
The Associated Press
LOS ANGELES — The number of U.S. homeowners who were put on notice for being behind on their mortgage payments fell in May to the lowest level since 2006, the result of a slowing housing market and lingering delays in banks' foreclosure process.
Mortgage lenders, many of which are still working through foreclosure-documentation problems that surfaced last fall, also took back fewer properties in May, the second monthly decline in a row, foreclosure-listing firm RealtyTrac Inc. said Thursday.
The delays continue to push the 2 million U.S. homes already on banks' books or in some stage of foreclosure further into limbo and put banks on track to repossess about 200,000 fewer homes this year than in 2010, the firm said.
"The problem with that, even though it sounds better, is that all of those foreclosure auctions we should have seen this year roll into next year, and that means it's going to take that much longer for the housing market to recover," said Rick Sharga, a senior vice president at RealtyTrac.
In Washington state 3,603 homes, or one in every 781, received a notice of default, were scheduled for auction or repossessed in May. That's down nearly 8.5 percent from April and nearly 26 percent from May 2010.
King County saw the most dramatic change among the local counties: Its 831 foreclosure filings were down 22.8 percent from April and a sharp 44.6 percent since last May.
Pierce County had 642 filings, representing one in every 483 homes: that's a drop of 14 percent from April and 31.6 percent from May of last year.
Snohomish County, with one in every 399 houses receiving a notice of foreclosure last month, saw the least decline — down nearly 4 percent from April and 7.5 percent lower than last May.
The pace of homes entering the foreclosure process and those ending up as bank-owned properties began slowing sharply last fall, when allegations surfaced that many banks relied on erroneous documents when they foreclosed on thousands of homes.
Since then, banks, federal regulators and state attorneys general have been reviewing how foreclosures were carried out the past two years. That has prompted lenders to resubmit paperwork on foreclosures and, in states where courts play a role in the process, caused a logjam of foreclosure cases.
Lenders also have put off on taking action against delinquent borrowers as U.S. home sales have slowed this year.
Despite the drop in foreclosure activity last month, several states continue to have outsize foreclosure rates.
Nevada led the nation, with one in every 103 households receiving a foreclosure notice in May. Bank repossessions fell 21 percent from April, but initial notices of default rose 8 percent.
Rounding out the top 10 states with the highest foreclosure rate in May are Arizona, California, Michigan, Utah, Georgia, Idaho, Florida, Illinois and Colorado.
Seattle Times reporter Christine Harvey contributed local foreclosure information.
The Morning Memo
The Morning Memo jump starts your day with weather, traffic and news
Career Center Blog
Dig into local Gardening