Anchorage Daily News

Foreclosures on Alaska single-family houses have hit their highest level in at least five years, according to a recent state report.

Click to enlarge

Story tools

Comments

E-mail a friend

Print

Share on Facebook

Digg this

Seed Newsvine

Send link via AIM

Follow on Twitter

Font size : A | A | A

The Anchorage foreclosure rate began its steep ascent a few years ago, increasing 166 percent between 2005 and 2007, according to the report by the Alaska Department of Labor and Workforce Development.

The state's foreclosure rate will probably remain high this year, according to the report. The 435 foreclosures between January and June was the highest amount for the first half of any year since 2003.

While state officials said late last month they weren't aware of any major problems developing in Alaska towns, the foreclosed properties are generally harmful to neighborhoods and bad for the economy.

They often fall into disrepair. Banks sell them at auction at reduced prices, driving down the value of neighboring homes.

But here's the silver lining: Alaska's foreclosure rate is the second-lowest in the country despite the recent rise. Only Montana's is lower.

"We're in an enviable position up here," said Gail Stafford, president of the Alaska Mortgage Bankers Association.

He said Alaska hasn't suffered as much as other states because of its healthy economy. Also, home prices in Alaska have not declined as dramatically as they have in parts of the country where values soared earlier this decade.

Less than 1 percent of Alaska's mortgages were in foreclosure in the first quarter of 2008, according to the Mortgage Bankers Association, which surveys 80 to 85 percent of home loans.

In hard-hit Florida, 4.6 percent of the state's home loans were in foreclosure in the same time period, the association reported.

Here's some more good news: One of the riskiest parts of the troubled U.S. housing market -- "subprime" loans to borrowers who have sketchy credit records, who agree to higher interest rates or who pay no money down -- is creating fewer foreclosures here, relatively, than in the rest of the country.

"Not only do subprime mortgages comprise a small proportion of Alaska's loan portfolio, but their rates of delinquency and default stand in sharp contrast to what's playing out nationally," according the state's report, published this month in the Labor department's magazine, Alaska Economic Trends.

Why is that?

Those same factors -- relatively flat home prices and the strong economy -- are probably playing a role, according to state officials and local loan officers and real estate agents.

"In general, our economy has been growing steadily for two decades now," said Brian Laurent, who authored the state's report on foreclosures.

In other parts of the country, people stuck with risky loans are having a hard time refinancing to get loan terms they can afford. For many others, their houses are now worth less than the amount they've borrowed, prompting them to default on their home loans, causing a foreclosure.

"The economy is strong enough here that people have enough money to keep their house and their payments going," said Niel Thomas, an Anchorage real estate analyst.

And, "Our (home) values are hanging in there," Stafford said.

Find Elizabeth Bluemink online at adn.com/contact/ebluemink or call 257-4317.

ADVERTISEMENT