The media is reporting that the Seattle-Tacoma-Bellevue area saw a huge increase in foreclosures from information provided by RealtyTrac. According to the media, the Seattle area has had an increase of 71% in foreclosures; one of the largest increases in the nation. I agree with CNBC's Diana Olick's take on the data:
"During the housing boom, Seattle was actually the last to see the big boom in prices and then on the other side, the last to see the big drop in prices so it could be that Seattle is kind of catching up with the rest of the country now seeing those foreclosures because prices did get so high there and drop so precipitously."
Foreclosures and short sales do impact property values and the current "appraised value" of your home as an appraiser may need to use a nearby short sale as a comparable property for your home. If you're considering refinancing, and your refinance requires an appraisal, this may impact your loan-to-value and home qualifying for the new loan if your home appraises for less than originally expected. Some refi's do not require an appraisal, such as an FHA Streamline (where you are refinancing an existing FHA mortgage to a new FHA mortgage) and some Fannie Mae Home Affordable refi's are qualified without an appraisal…but a majority of mortgages do require an appraisal. (I wish that all appraisals could be waived if the home owners qualifed based on employment, income and credit…I truly beleive this would help stimulate the economy…but it's not the case).
If you are delaying a refinance, you may be risking more than losing today's low interest rate, you may be risking your home's appraised value.
Related post:
It's Not You,It's Your Neighbors
Declining Home Values: Good for Buyers – Bad for Refi's
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