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Colorado foreclosures both rise and fall

Completed ForeclosuresBy one measure, foreclosure activity in Colorado is declining. By another, foreclosures are still going through the roof.

The good news is that completed foreclosure sales in Colorado during 2009 fell 4 percent from 2008’s totals, and have fallen 18 percent since 2007, shows a state report released today. However, foreclosure filings were up 18 percent in 2009 from 2008, rising to a record 46,394.

According to the  report released  by the Department of Local Affairs’ Division of Housing, there were 20,437 completed foreclosures in the state during 2009, falling from 2008’s total of 21,306. In 2007, completed foreclosures reached 25,056.

While completed foreclosures fell, new foreclosure filings, which begin the foreclosure process for borrowers, rose from 39,333 in 2008.

Foreclosure alternatives rising

Foreclosure Filings

However, since 2007, in spite of increasing totals in new foreclosure filings, the total proportion of filings that ended in a solution other than foreclosure increased by 51 percent. In 2007, 37 percent of foreclosure filings ended in a result other than foreclosure such as short sale, loan modification, refinance or other solution. By 2009, this total had increased to 56 percent. The result has been fewer completed foreclosures even as new foreclosure filings have increased.

The falling totals in completed foreclosures were driven by significant declines in foreclosure activity in the Denver metro area. In Denver County, foreclosures fell 28 percent, and they fell 20 percent and 16 percent in Adams and Arapahoe Counties respectively. The only county in the Denver area to report increases in completed foreclosures during 2009 was Boulder County where they increased 6 percent.

“We’re cautiously optimistic that we won’t be seeing the sorts of increases in foreclosures that we saw during 2006 and 2007,” said Pat Coyle, a spokesperson with the Colorado Division of Housing. “Colorado’s Foreclosure Hotline and its network of housing counseling agencies have helped over 16,000 households avoid foreclosure since 2006, and we see that reflected in these numbers.”

As completed foreclosures fell quickly in the Denver area, foreclosure activity in other areas of the state increased. Completed foreclosures increased 11 percent in El Paso County and 4 percent in Weld County. Among metropolitan counties, Mesa County reported the largest increase with completed foreclosures growing 223 percent year-over-year to a total of 359.

Totals reported are county-wide totals, and individual neighborhoods may still be experiencing increases and decreases in foreclosure activity that are quite different from what is seen at the county level.

The report noted that while foreclosures were limited to Colorado’s Front Range in earlier years, Colorado’s smaller and more rural counties have become increasingly affected by foreclosures. Teller County, Park County, Morgan County, and Fremont County all reported increases of 30 percent or more in completed foreclosures. On the Western Slope, completed foreclosure totals in Mesa County and nearby counties such as Delta, Montrose, Moffat and Rio Blanco Counties have all increased since 2008.

Economy foreclosure driving force

“These changes in the geography of foreclosures shows that the problem has moved beyond overbuilding and adjustable rate mortgages, said Stephanie Riggi, manager of the Colorado Foreclosure Hotline call center. “We’re seeing unemployment and falling wages as much more of a driving factor behind foreclosures, and it’s not just the Front Range that’s affected.”

Completed foreclosures are opened foreclosures that have proceeded to foreclosure sale at auction. Filings denote the beginning of the foreclosure process, and once a foreclosure is filed, the borrower has approximately four months to work with the lender to avoid a completed foreclosure. It is during this period that borrowers work with lenders and housing counselors to work out loan modifications, short sales, or other ways of curing the foreclosure. According to the report, since the second quarter of 2009, the number of foreclosures cured in Colorado has increased 50 percent.

The full report is available on the Division of Housing at this link.

Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.