Va. foreclosure rate reveals uncertainty

By: Carol Hazard | Times-Dispatch
Published: February 12, 2009

Virginia foreclosures in January fell 30 percent from December, but were 82 percent higher a year earlier, according to monthly data released this morning by RealtyTrac.

While good news, the month-to-month decline is likely attributable to a foreclosure moratorium by some lenders.

One in every 610 households in Virginia, or a total 5,366, received a foreclosure filing in January. Filings include notices of default, auction and foreclosure sales.

The problem is not as bad here as it is nationwide. One in every 466 households across the country had trouble paying mortgages in January, the online researcher of foreclosures reported.

Lender repossessions nationwide in January dropped 15 percent from the previous month but rose 47 percent from a year ago.

"At this point, foreclosures are trickling into all income levels," said Helen O'Beirne, director of the policy department at Housing Opportunities Made Equal Inc. of Virginia, an housing advocacy group in Richmond.

"We're still seeing defective subprime loans reset at rates that people can't afford, but a lot of our new foreclosures are more traditional, related to job losses, high medical bills or being upside down in mortgages," owing more than the houses are worth.

O'Beirne said loan servicers for the most part are still unable or unwilling to modify mortgage loans to help people stay in their houses.

RealtyTrac spokesman Daren Blomquist said the month-to-month declines in property repossessions appear to be connected to moratoriums on foreclosure sales.

"We saw a lot of states with declines in January from December," he said.

Fannie Mae, Freddie Mac and other lenders voluntarily suspended foreclosures starting in December to help ease the problem, but a new wave of foreclosure activity is expected to hit in the next couple of months as moratoriums are lifted.

Nevada recorded the highest state foreclosure rate, with one in every 76 housing units receiving a foreclosure filing in January. Other states in the top 10 were California, Arizona, Florida, Oregon, Illinois, Michigan, Georgia, Idaho and Ohio.

Virginia had the 15th highest rate.

According to a Richmond Times-Dispatch analysis of court records, there were 2,452 foreclosures in central Virginia in 2008, up 100.8 percent from 2007.

Contact Carol Hazard at (804) 775-8023 or chazard@timesdispatch.com.