Nationally, foreclosures are way down, but not in the District of Columbia. According to CoreLogic’s National Foreclosure Report for June 2016, the U.S. foreclosure inventory declined by 25.9% and completed foreclosures declined by 4.9% compared with June 2015. The number of completed foreclosures nationwide decreased year over year represents a decrease of 67.5% from the peak of 117,835 in September 2010. And the number of U.S. residential mortgage loans with payments past due slipped to a 10-year low in the second quarter as an improving labor market helped a housing sector that went bust nearly a decade ago.
D.C. had the lowest number of completed foreclosures, but we also had the third-highest foreclosure inventory rate (2%) in the country, tied with Hawaii. The June 2016 national foreclosure inventory rate is the lowest for any month since August 2007. So why are there so many new foreclosures in the District of Columbia?
The “foreclosure inventory” includes homes at any stage of foreclosure process, and “completed foreclosures” includes the total number of homes lost to foreclosure. Approximately 8.4 million homes have been lost to foreclosure since the all-time high in the homeownership rate in 2004. Since the financial crisis began in September 2008, there have been approximately 6.3 million completed foreclosures nationally.
D.C. Foreclosures Buck National Trend
The reason why D.C. is bucking the national foreclosure trend is that there is an enormous backlog of delinquent mortgages. This is the result of the 2010 passage of the Saving D.C. Homes From Foreclosure Act, which imposed new requirements on mortgage lenders in D.C.
Lenders have now finally figured out that 2010 law and are working through the delinquent mortgage backlog created six years ago. D.C. is a judicial foreclosure jurisdiction, which means your mortgage company must bring a lawsuit. A Complaint for Judicial Foreclosure filed in D.C. Superior Court starts the foreclosure process. Foreclosure lawsuits in D.C. have spiked over the past 2.5 years. That’s why the district is just now catching up to the rest of the country in completed foreclosures. Foreclosures are way down, but not in the District of Columbia. Foreclosures in D.C. are still just heating up. Most people want to keep their homes, and you have options, including:
- Mortgage modification, even if you have been previously denied
- Loss-mitigation, including modification, refinance, and deed-in-lieu of foreclosure
- Chapter 13 or Chapter 7 bankruptcy
- Delay of foreclosure to allow for the sale of the property
Every household is different, and every homeowner has different dreams and goals. Even if you want to surrender the property to the mortgage company, you must wisely negotiate the foreclosure process. If you receive a Complaint for Judicial Foreclosure in the Washington, D.C., you must act quickly and contact a lawyer immediately. Call Lee Legal at (202) 448-5136 or visit https://lee-legal.com to schedule a free consultation.