PWC foreclosure rate sits at 1,000 a month

Occoquan saw one. Woodbridge, 481. And Prince William as a whole? A total of 1,043.

That’s the number of foreclosures for July for the county, according to RealtyTrac, a group that compiles information on the housing market nationwide.

The rest of the breakdown in the county for July: Manassas, 218 foreclosures; Triangle, 84; Bristow, 74; Dumfries, 73; Gainesville, 67; Haymarket, 31; Nokesville, 12; and Catharpin, 2.

The figures aren’t so dismal when viewed through the context of a year. In July 2008, the number of foreclosures in the county stood about 1,200.

“It looks to me like we’re in a holding pattern right now,” said Bill Vaughan, with the county’s finance department. “We have seen that the market, for the residential at least, has actually improved a little bit and what’s going on is the volume [of sales] is up dramatically,” due largely to drops in prices.

It’s the business side of things that has county finance experts more concerned. In a presentation to supervisors last month, finance officials reported “the commercial real estate market is still declining,” vacancy rates were increasing, and “delinquency rates on commercial loans [were] increasing.”

Vaughan said Friday that the vacancy rate for all commercial, including retail, in the second quarter of this year stood at 9.5 percent, “which is fairly high for Prince William.”

Some foreclosure offsets have been achieved with the county’s recent receipt of a $4.1 million grant from the federal Housing and Urban Development Department. The Prince William Office of Housing and Community Development has allotted part of that grant to various nonprofits in the area to assist homeowners and potential buyers.

According to the OHCD’s July performance report, for example, Catholics for Housing received $399,500 to “assist five homebuyers purchase and rehabilitate properties,” while Good Shepherd Housing Foundation and Northern Virginia Family Service split $800,000 to “purchase and rehabilitate three properties each to be used as affordable rental housing for households below 50 percent of area median income.”

Such saving graces haven’t been so easily replicated in other counties. Statewide, the residential market is showing clear signs of continuing distress.

In all of Virginia, 6,406 foreclosures were added in July, representing a 23 percent jump over June figures, and an 11 percent hike from July of 2008. Between January and July, total foreclosures for the state hit 39,210. And despite lower prices and a decided buyer’s market, sales haven’t been so brisk. In the six-month period that began in January, only 10,229 of those foreclosed homes have been resold.

Nationally, it’s more of the same, with July foreclosures hitting at 360,149, a 7 percent spike from last month. In July of last year, the rate nationwide was 32 percent lower, also.

Foreclosure steps

Foreclosure isn’t an overnight process. Step one starts with a notice of default from the mortgage lender. This letter is a reminder of overdue payment, also known as a notice of delinquency. Housing groups emphasize the importance of contacting the lender at this point and requesting assistance with payment terms.

“If a remedy can’t be reached at this point, then the foreclosure process will continue,” HUD reports.

Step two, according to HUD, is called the redemption period. This is “after the homeowner defaults on their mortgage, but before the lender can legally evict them,” HUD reports. The lender may file a lawsuit against the homeowner; the homeowner generally has a set period of time established by state law to reply to the suit.

The homeowner can still try and sell the house during step two, and in so doing, avoid foreclosure. If the home doesn’t sell — and the homeowner doesn’t come up with the arrears mortgage amount — step three commences, the auction sale.

“The auction sale,” HUD states, “is where a foreclosure home is sold at the county courthouse to whoever bids the highest amount over a set floor price.”

This step usually starts about 30 days after it’s known the homeowner can’t sell the house or pay the past due amount — about a month after step two is complete. During step three, the homeowner might still reside at the property, though notices of auction for the home’s foreclosure have been officially placed in the local newspaper and filed at the county courthouse.

At the conclusion of an auction sale, however, “the foreclosure home is officially transferred to the new owner,” HUD reports.

And thus the fourth step: post foreclosure, when the lender assumes total control of the property.

“After the sale is complete, the homeowner will be notified on the number of days they have to vacate the home,” HUD reports. “If they do not vacate the home by the date that is given, then the eviction process will begin and the local sheriff will come to the home to make sure the eviction is carried out if someone is still residing in the house.”

Staff writer Cheryl Chumley can be reached at 703-670-1907.