Bad Colorado Mortgage News: State Foreclosures Hit All-Time High
It’s official.
A record number of real estate foreclosures have been filed in the Denver housing market this year.
In the first 11 months of 2006, public trustees in the seven-county metro area opened 17,782 foreclosures. That’s 3.85 percent higher than the record set in 1988, during the oil industry bust, where poor financial situations led to numerous Colorado mortgage defaults.
The Rocky Mountain News quotes experts that say other parts of the country that recently had hot real estate markets need only look to Denver to see what’s in store for them.
A large percentage of filings are concentrated in the “foreclosure belts” of Adams and Weld counties, north Aurora, and northeastern Denver neighborhoods such as Montbello and Green Valley Ranch.
Some upscale neighborhoods are virtually untouched.
“I was curious how many foreclosures there were in Washington Park and Platte Park, so I went into the foreclosure data by ZIP codes, and there weren’t any,” said Mike Rinner of the Genesis Group, which tracks Front Range housing data.
As a percentage of the number of homes and Colorado home loans on the market, the foreclosure rate is still lower today than after the loss of jobs in the wake of the energy crash in 1988.
Basis for Colorado mortgage problem: Still, today’s foreclosure crisis is increasingly taking its toll on homeowners, especially with scams and mortgage fraud on the rise. Last year, the FBI described Denver as one of the 10 top “hot spots” in the country for mortgage fraud.
“It’s like the wild, wild West out there,” said Zach Urban, a housing counseling manager for the nonprofit Brothers Redevelopment, on Monday. Urban operates the Colorado Foreclosure Hotline for the Colorado Division of Housing.
“Just today, I was talking to a couple in their 70s in Wheat Ridge,” Urban said. “They bought their house in 1994 and got into a bad loan. He had a heart attack in September and lost his job. Now he and his wife are working at Wal-Mart” with hopes of earning enough to keep their home.
Mark A. Murphy, 42, is trying to sell his house in Aurora before the mortgage lender takes it back. He has fallen four months behind on his mortgage after losing his job as a production manager for a textile company.
“Basically, they were downsizing,” Murphy said. “After being out of work for a few months, it came down to paying my bills or paying my mortgage.”
When he bought his home two years ago, other comparable homes in his neighborhood were selling for $235,000, he said, about $50,000 more than he paid.
The four-bedroom, three-bath home, with 1,944 square feet of finished space, is on the market for $205,000.
“My house was really trashed (when I bought it),” Murphy said. “I’ve put in new floors, new carpet, and a new kitchen and basically painted it.”
Ironically, Murphy bought his home out of foreclosure.
“I believe this property has been in foreclosure four times,” Murphy said. “I really like living here. It’s a very nice neighborhood. If I can get a full-time job quickly, I may be able to get current and keep it.”
Countless other residents feel the same way about their Colorado mortgages and pieces of property.