Time for our June update on Foreclosure activity in King, Snohomish, and Pierce counties. First up, the Notice of Trustee Sale summary:
King: 1,248 NTS, up 71% YOY
Snohomish: 620 NTS, up 75% YOY
Pierce: 803 NTS, up 48% YOY
The new law essentially makes it more difficult for a lender to foreclose on owner-occupied homes with mortgages minted from 2003 through the end of 2007, and adds an extra 30 days to the process. Since a notice of trustee sale comes 30 days after the notice of default, a surge in default notices filed before the bill became law in late July could result in a continued surge in notices of trustee sale through this month.
After that, it is likely that we will see a lull in apparent foreclosure activity for a month or two as the newly-legislated time in the pipeline fills up. My guess is that by the end of this year we will probably be back to a more “normal” post-bubble foreclosure level of ~1,000 notices of trustee sale per month.
Frequent commenter Kary L. Krismer also explained the situation with SB 5810 over on the SREP blog last week.
Here’s a simple look at how July’s foreclosures compare to the same month last year in each of the three counties:
To give the numbers some more context, here’s a comparison of July closed sales reported by the NWMLS and July notices of trustee sale:
We’re back to more people buying homes than losing them in all three counties, at least.
Next let’s look at the percentage of households that received a Notice of Trustee Sale (based on household data for each county from the American Community Survey, assuming linear household growth between surveys):
King County came in at 1 NTS per 630 households, Snohomish County had 1 NTS per 424 households, and Pierce had 1 NTS for every 370 households (higher is better).
According to foreclosure tracking company RealtyTrac, Washington’s statewide foreclosure rate of one foreclosure for every 511 households was 13th worst among the 50 states and the District of Columbia (up from 17th last month). As usual, this was still better than the national average of 355 households per foreclosure. Note that RealtyTrac’s definition of “in foreclosure” is much broader than what we are using.
Following are the usual charts of King, Pierce, and Snohomish County foreclosures from January 2000 through June 2009. Click below to continue…
Down slightly from the June peak, but still the second-highest level ever.
Same deal in Snohomish: second-highest level of all time.
And again, same in Pierce.
It will be interesting to see if this new law has any effect other than to simply delay the foreclosure pipeline. Based on similar actions that have been attempted in other states, I doubt anything else will happen.
Note: The graphs above are derived from monthly Notice of Trustee Sale counts gathered at King, Snohomish, and Pierce County records. For a longer-term picture of King County foreclosures back to 1979, refer to the final chart in this post. For the full legal definition of what a Notice of Trustee Sale is and how it fits into the foreclosure process, check out RCW 61.24.040. The short version is that it is the notice sent to delinquent borrowers that their home will be repossessed in 90 days.