Foreclosures, Delinquencies Rise in Seattle Housing Market

An increasing number of Washington homeowners’ mortgages are delinquent or in foreclosure, but the state continues to hold up better than the country as a whole, and the gap is widening.
The state’s rates of Washington mortgage delinquencies and foreclosures went up 8.7 percent and 22.5 percent, respectively, in the second quarter, compared with the same period in 2006, according to the Mortgage Bankers Association. The overall mortgage delinquency rate for the period was 2.6 percent, and the overall foreclosure rate was half a percent.

However, the percentage increases in delinquencies and foreclosures were around half of the national rates, which hit an all-time high in the second quarter. Washington ranked 47th among states for delinquencies and 49th in foreclosures.

The Mortgage Bankers Association tracks mortgage loans for houses and condos in buildings with up to four units, and defines delinquencies as loans with payments that are at least 30 days late.

The state’s delinquency and foreclosure rates rose 13.4 percent and 4.3 percent, respectively, from the first quarter of the year - again less than the national increase. In a news release, the Mortgage Bankers Association said the rates tend to increase from the first to the second quarter.

The association attributed Washington’s relatively low percentages to the fact that 15 percent of the state’s loans are subprime or Federal Housing Administration loans, compared with 21 percent for the country as a whole.

Such loans, which go to people with poor credit, generally have higher rates of delinquency and foreclosure.
Indeed, Washington subprime, adjustable-rate home loans saw delinquencies increase 21.7 percent from a year earlier and foreclosures go up 78.1 percent - changes that were much larger that those among other loans, but still smaller than the comparable increases nationally.

While the industrial Midwest continued to suffer, the situations in California, Florida, Nevada and the Arizona housing market are driving the national delinquency and foreclosure rates, Doug Duncan, the Mortgage Bankers Association’s chief economist, said in a statement accompanying the numbers.

“Were it not for the increases in foreclosure starts in those four states, we would have seen a nationwide drop in the rate of foreclosure filings,” he said. “Thirty-four states had decreases in their rates of new foreclosure and the increases were very modest in the states with increases, other than those four.”

SOURCE: The Seattle Post-Intelligencer