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Bank owned homes foreclosures rose substantially in Washington as more and more residents are finding themselves severely affected by the economic downturn.
Data released by the U.S. Bankruptcy Court Western District Office showed that for the first six months of this year, local bankruptcies and the number of bank owned homes foreclosures rose substantially. The report noted that as of end of June, about 392 bankruptcy filings were posted in Whatcom County, representing a 53 percent increase compared with figures in the first half of last year.
In 2006, there were only 283 bankruptcy filings in the whole of Whatcom. Meanwhile, the number of repossession filings in the county rose at a rapid pace. According to the Whatcom County Auditor’s Office, the first half of this year saw 519 notices of trustee sale, an increase of 77 percent compared to the same period the previous year.
The filing of notices is one of the steps in the foreclosure proceedings. The report pointed out that 58 percent of these filings were made from April to June. According to industry experts, the bank owned homes foreclosures crisis has been expanding into several demographic sectors. Some said that banks are repossessing properties under $300,000 with more number of luxury homes receiving notices of foreclosures.
Industry experts believed that the recession has a much wider impact than reported, adding that Whatcom County is still faring well than the rest of the country. However, they expect the foreclosure crisis to continue to rise for the remainder of this year.
Experts explained that the number of foreclosed homes will continue to rise in 2009 because of several factors preventing homeowners to achieve financial recovery. These factors include the rising unemployment rate and refinancing problem.
Real estate professionals claimed that a large amount of three-year adjustable rate mortgage are resetting at a higher rate. Additionally, it is becoming more difficult for distressed homeowners to refinance, particularly if the properties they own are valued less than the total mortgage they owe.
They explained that bankruptcy and foreclosure are correlated in a sense that homeowners who filed for bankruptcies tend to lose their properties to bank owned homes foreclosures.