Thanks to banks, fewer homes up for auction

SEATTLE - It's a seeming contradiction - the number of foreclosed homes up for auction at the King County Courthouse is going down while the number of home foreclosures last month was up.


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But there's a logical explanation.

A week ago, four of the nation's largest banks agreed to put a temporary stop on foreclosures. And the result is a temporary moment of calm for people who fear they may be about to lose their homes.

Bank of America, Wells Fargo, Citigroup and JP Morgan Chase have all put temporary moratoriums on foreclosures until March 6.

The big banks' latest halt on foreclosures is actually the third temporary stop on foreclosures since November.

And as a result, brokers and investors who attend these auctions on a regular basis say they are seeing a slowdown.

This week's foreclosure list started with 322 homes on the block. But by Thursday, the list was already down to 122.

The auctions mostly amount to bidding wars for a select few investors who can pay cash on the spot, for a winning bid on a foreclosed home.

And then there are desperate people like Gwendolyn Chambliss, hanging on the outside, hoping for a miracle. Her foreclosed Central District home is on the block.

"I've never been here before, I don't know what the process is," she said Friday as she tried to find out whether her home had been sold.

With the help of a professional broker, she found out her lender pulled the house off the auction block because there were no qualified bidders - nobody interested.

The broker said the home would probably go back to the bank because it doesn't have a minimum bid - and that happens often.

And therein lies another reason for the slowdown in the number of foreclosed homes at auction.

Christopher Hall, owner of Vestus Foreclosure Group, says the big banks' moratorium is mostly responsible for the drop, specifically for adjustable rate mortgage properties that are owner-occupied.

"So it's a good thing, bad thing," he says.

It's bad for investors who are seeing few killer deals, and good for every homeowner - foreclosed or not, because it's going to protect home values.

But Gwedolyn Chambliss isn't that lucky. She filed bankruptcy and moved out before the hold on foreclosures was put in place.

"It was to the point where the mortgage lender didn't want to give us a chance," she says.

Washington state's foreclosure rate is still lower than the national average.

And now everyone is also waiting to see if President Obama's $75 billion housing plan will trickle down to those facing foreclosure the hold is lifted on March 6.