Colorado Mortgage Foreclosures Surge
The Colorado housing market is on pace to see a 25 percent increase in foreclosure filings this year, with 19,460 being filed in the first six months of the year, according to a State Division of Housing report released this week.
The report showed more than half the foreclosures — 10,017 — occurred during the second quarter. Foreclosure filings increased 6 percent in the that quarter from the first quarter.
The division anticipates more than 36,000 Colorado mortgage defaults this year, almost a 27 percent increase from the record 28,435 in 2006.
“It looks like we’re very unlikely to see any declines in foreclosure rates this year,” Kathi Williams, director of the Colorado Division of Housing, said in a statement.
“There are still plenty of adjustable-rate mortgages set to readjust, and there is plenty of inventory on the market. If you can’t make your payments, and you need to sell your house, odds are that you won’t be able to sell it quickly or easily. That’s certainly part of what’s driving the foreclosure numbers we’re seeing along the Front Range.”
The report also showed that in the first six months there were 11,908 foreclosure sales in the state, compared with 13,643 for 2006.
Foreclosure sales increased 118 percent from 2003 to 2006.
A foreclosure sale is the stage in the foreclosure process at which the property is sold at public auction 45 to 60 days after the initial foreclosure filing.
The sale also marks the point at which the homeowner has lost the right to repay missed payments and reinstate the home loan.
Zachary Urban, administrator of the Colorado Foreclosure Hotline (1-877-601-HOPE) and director of housing counseling for Brothers Redevelopment, said there’s been no dropoff in hotline activity.
“What concerns us the most, though, is that there is an increasing number of properties going to sale at auction,” Urban said. “A foreclosure filing is not the end of the world, but once the home is sold at auction, there’s very little that can be done. People need to call us because there’s a lot that can be done between the filing and the sale.”
Not all homes that enter the foreclosure process are sold at an auction by the county public trustee office.
In the Denver housing market, many banks instead accept a “short-sale,” in which the lender will take less than the mortgage amount for the home. Typically, the homeowner still loses the house, but it usually costs the seller less and does less damage to the owner’s credit report.
Most of the growth in foreclosure filings was found in Adams and Denver counties. Adams County filings increased 19 percent from 1,456 to 1,734 over the last two quarters.
Denver filings increased 10 percent to 2,151 from 1,940. In many counties, there was little growth in foreclosure filings between the first and second quarters. This is consistent with seasonal factors that generally point to less growth in foreclosure activity during the second quarter, according to the division of housing.
SOURCE: Rocky Mountain News