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Bank repossessions down in D.C. area

In California, as in many states, people seek help restructuring mortgages to avoid foreclosure.
In California, as in many states, people seek help restructuring mortgages to avoid foreclosure. (Justin Sullivan - Getty Images)
By Renae Merle
Washington Post Staff Writer
Friday, November 13, 2009

Bank repossessions of homes in the Washington area declined last month but are on pace to surpass last year's total in most parts of the region by the end of the year, according to data released Thursday by RealtyTrac.

The decline likely reflects that banks have slowed down foreclosure activity to give borrowers more time to apply for loan modifications that could help them stay in their homes, according to RealtyTrac. The company runs an online database for foreclosures and says its information covers 90 percent of U.S. households.

In the District, the number of real estate-owned properties -- when a bank has taken possession of a home and evicted the borrower -- fell by half to 46 in October compared with 102 in September. In Maryland, bank repossessions fell to 786 from 865 the previous month. Virginia also saw a decrease in bank repossessions, 1,845 in October compared with 2,028 in September.

This year, 590 homes have been repossessed in the District, down slightly from the same period last year. But the numbers are up significantly in Maryland, with 6,105 homes being taken back by banks this year, and Virginia, where lenders have taken back 18,122 homes.

Those figures are not surprising given the increasing number of borrowers seeking help because they have lost jobs or income, said Kimberly T. Henderson, director of housing and community development at the Greater Washington Urban League.

"I think we will continue to see an uptick," she said. "What we have to be mindful of is that we may not be able to save everyone." In some cases, the borrower may be better off giving up the home and searching for affordable rental housing, Henderson said.

The data also buttress a recent report by the Urban Institute that found that the number of Washington-area homeowners in foreclosure proceedings has more than doubled in the past year. The Washington-based nonprofit that conducts policy research found that the problem remains most acute in a few counties -- Charles, Prince George's and Prince William -- but warned that it could get worse as more borrowers fall behind on payments.

Overall, foreclosure filings, which can range from default notice to bank repossession, were down in the Washington region last month, tracking the overall national trend, according to RealtyTrac. Nationally, foreclosure filings declined 3 percent in October from September, the third straight monthly decline. But the number was up 19 percent compared with the same period last year.

The monthly decline could "on first blush [be] an indication that the foreclosure tide may be turning," James J. Saccacio, RealtyTrac's chief executive, said in a statement. "However, the fundamental forces driving foreclosure activity in this housing downturn -- high-risk mortgages, negative equity, and unemployment -- continue to loom over any nascent recovery."

Some economists expect nearly 2 million borrowers to lose their homes this year, despite progress being made through the Obama administration's foreclosure prevention program, called Making Home Affordable. More than 650,000 borrowers have had mortgage payments reduced under the program this year, and government officials aim to help up to 4 million homeowners as part of the effort.

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