Number of homes in foreclosure pipeline dips in October nationally

The number of homeowners who may lose their homes dipped in October, the third straight monthly decline, as foreclosure-prevention programs helped more borrowers.

But foreclosure filings are still up 19 percent from a year ago, RealtyTrac said today, and rising job losses continue to threaten the stabilizing trend.

More than 332,000 households, or one in every 385 homes, received a foreclosure-related notice in October, such as a notice of default or trustee's sale. That's down 3 percent from September.

In Washington, however, filings were up 9 percent. They rose 92 percent in Pierce County and 56 percent in Snohomish County, while falling 6 percent in King County.

But — again bucking the national trend — there were 22 percent fewer filings in Washington last month than in October 2008.

Nationally, banks repossessed more than 77,000 homes last month, down from nearly 88,000 homes in September.

But in King County repossessions increased from 314 to 511.

New state programs, like one launched in Nevada in July, that require mediation before banks can seize a property have helped stem foreclosure activity, said Rick Sharga, senior vice president at RealtyTrac.

Also, anecdotally, lenders are delaying foreclosure as they evaluate which borrowers might qualify for the federal loan-modification program, he said.

"That's the reason there's been a buildup of homes that are seriously delinquent but not foreclosed," he said.

Despite Nevada's legislative efforts to slow foreclosures, the state still clocked in the nation's highest foreclosure rate for the 34th month in a row, followed by California, Florida, Arizona and Idaho. Rounding out the top 10 were Illinois, Michigan, Georgia, Maryland and Utah.

Washington ranked 29th. Pierce, Snohomish, Clark, Thurston and Skagit counties had the five highest foreclosure rates.

While filings fell in October nationwide, foreclosures remain near record highs and the mortgage industry is still struggling to manage the onslaught. The government has had to push many lenders to participate in the Obama administration's loan-modification plan.

The Treasury Department said Tuesday that more than 650,000 borrowers, or 20 percent of those eligible, had signed up for temporary trial plans lasting up to five months. But since the beginning of September, only about 1,700 modifications had been made permanent.

Seattle Times business reporter Eric Pryne contributed to this report.