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Foreclosures hit Northwest homes, business

More than 50 percent increase over 2007

By Rolf Boone | The Olympian • Published December 21, 2008

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Mortgage foreclosures in Thurston County increased more than 50 percent in 2008 compared with 2007, an indication the slowing economy is contributing to this growing problem, newly compiled data show.

Notice of trustee's sales filed with the Thurston County Auditor's office rose to 1,010 through Dec. 19, up from 662 in 2007.

The notices do not necessarily mean property in default will result in a foreclosure, but it is a sign the property owners are behind on their mortgage payments and that the lenders have started the foreclosure process. The notices typically identify the borrower, lender, property address, amount of money owed on the property, and a date for a public auction.

New trend

Foreclosures have increased in Thurston County the past few years. When the real estate market was stronger here, the notices dropped to a low of 409 in 2005, the data show. They started to rise as some borrowers began to default on riskier loans, also known as subprime loans.

Today's foreclosures are a combination of some lingering subprime problems, combined with a slower economy, said Mark Steves, president-elect of the Thurston County Realtors Association. Other factors include the inability to refinance because the home has dropped in value or is worth less than the mortgage itself, he said.

Median home values in Thurston County have not dropped sharply but they were 5 percent lower in November 2008 compared with November 2007, according to Northwest Multiple Listing Service data.

Steves, who has worked in real estate for 30 years, is an agent in the Yelm area. In the past few months, he said 40 percent to 50 percent of his business has been fueled by distressed properties — properties already owned by a bank, or in which lender has agreed to sell the house for less than the value of the mortgage, also known as a "short sale."

'Live at the maximum'

Homeowner Bill Coultas of Olympia said his lender has started the foreclosure process on his home, but he is hoping to save his house by hiring an attorney and filing bankruptcy.