The following article was published in Business In Vancouver July 1-7, 2008; issue 975

Foreclosures on the rise here, but there's no need to panic over stats

REAL ESTATE ROUNDUP: By Peter Mitham

Numbers a bit misleading as there are more mortgages in B.C. than ever before

The stats gathered by New Westminster real estate educator and investor Kap Hiroti, who tracks B.C. foreclosures using B.C. Supreme Court filings, suggests the volume of foreclosure proceedings initiated in the province has risen from 10 a week in 2006 to 20 a week today.

The surge needs to be put in context, however. While Statistics Canada and many other agencies don't track foreclosure numbers, the Canadian Bankers Association regularly reports the number of mortgages in arrears.

While not all properties with mortgages in arrears enter foreclosure (Hiroti says it can take as many as three missed payments for a foreclosure proceeding to begin), the trend in arrears is telling.

Stats gathered from the country's major financial institutions indicate that mortgages in arrears have indeed increased over last year but remain well below the levels seen between 1998 and 2002.

More than 0.5% of all mortgages in B.C. were in arrears a decade ago. Today, just 0.15% of mortgages are in arrears - a proportion that has been relatively stable in recent years.

Put another way if more homeowners are in arrears - and more properties entering foreclosure proceedings - it's primarily because there are more mortgages than ever before.

Thrice as many, in fact, according to the bankers' stats.

Small surprise, then that Andrew Bury, a partner in the Vancouver office of the Gowlings law firm, says it's busier than it was year ago. Still, it's nowhere near as busy as in the late 1990s.

"It's not like people are filling up courtrooms with foreclosures," he said.