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Washington state sees ‘boomerang foreclosures’, with rate in January doubling from the year before

Post by Kathleen Cooper / The News Tribune on Feb. 13, 2013 at 9:01 pm with No Comments »
February 13, 2013 5:27 pm

Washington state bucked the national trend in foreclosure activity, new data show, with the number of homes in some state of foreclosure more than doubling in a year.

Some 4,246 properties were in some state of foreclosure in January, according to foreclosure listing firm RealtyTrac. That’s a 110 percent increase since January 2012, making Washington No. 7 in the nation for rate of foreclosures. It’s also the opposite of the national trend, which showed a decrease of 28 percent in a year.

Washington is seeing “boomerang foreclosures,” RealtyTrac vice president Daren Blomquist said Wednesday in an email.

“(T)he foreclosure industry is now playing catch up with foreclosures delayed by the ‘Foreclosure Fairness Act’ that was passed back in 2011 in Washington and took effect in July 2011,” he wrote. “This forced lenders to slow down the pace of foreclosures in the short term, but resulted in a backlog of distressed properties that ultimately did not qualify for any type of foreclosure alternative and so are now being pushed back into the foreclosure pipeline.

Graphic courtesy of RealtyTrac
Graphic courtesy of RealtyTrac

“The silver lining here is that this should be a relatively short-term phenomenon and is not a sign that the Washington housing market is suddenly taken a nosedive,” Blomquist wrote.

The national decrease was driven by California, RealtyTrac said, which had new legislation go into effect at the beginning of the year. Called the Homeowners Bill of Rights, it extends the rules of the national mortgage settlement to all mortgage servicers — things like a single point of contact for customers. The law also allows fines of up to $7,500 per loan for filing unverified mortgage documents.

“The downward foreclosure trend in California accelerated into hyper speed in January, decisively shifting the balance of power when it comes to the nation’s foreclosure activity,” RealtyTrac vice president Daren Blomquist said in a news release.

California had 18,093 homes in some state of foreclosure last month, down 65 percent from the year before.

Click on the map below for more detailed data.

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