John Rebchook is a former Rocky Mountain News reporter with more than 30 years of experience in writing and communications... One out of every 418 households in Colorado was in some stage of foreclosure in February, identical to the national average, according to report released today.
Overall, Colorado ranked No. 11 nationwide, shows the report by Irvine, Calif.-based RealtyTrac. A few years ago, Colorado was typically ranked in the top three. Even last year, Colorado consistently was in the top 10, as far as its foreclosure rate. But Colorado’s ranking has slipped, while the foreclosure rate has climbed in other parts of the country, especially California, Nevada and Florida.
“The latest report seems to be continuing the trend in which Colorado ranks near the national average in its foreclosure rate,” said Ryan McMaken, spokesman for the Colorado Division of Housing, who uses a different methodology to track foreclosures in Colorado.
Colorado’s foreclosure rate in February rose by 22.2 percent from February 2009, while the overall national increase was 6.22 percent, according to RealtyTrac. And from January, Colorado’s foreclosure rate rose 2.49 percent, while the nation as a whole saw a month-to-month decline of 2.28 percent. RealtyTrac tracks every aspect of foreclosures, from the first notice to delinquent homeowners until the property becomes a REO and is in the hands of the lender.
Colorado 39th in delinquent loans
But McMaken said that RealyTrac’s numbers do not tell the entire story.
“As usual, the Realtytrac state rankings should be checked against the mortgage bankers data which shows Colorado at 39th in the nation for the number of loans that are seriously delinquent,” McMaken said. “The fact that Colorado is falling much more quickly in delinquency rankings than in Realtytrac rankings would lead me to conclude that Colorado is very slowly dealing with its accumulated inventory of foreclosing properties, but that the rate at which new properties are defaulting in Colorado is slowing at a much faster rate.
“This all only tells us what’s going on in Colorado relative to other states, of course. Colorado is clearly improving compared to other states, but still has its own set of challenges, and is improving only very slowly over past annual activity”
McMaken also said that the 22 percent year-over-year comparison is misleading, although he said a state report, that likely will be released next week, also will show an increase.
“However, it is important to keep in mind that there was very little activity in February 2009 due to moratoria put on foreclosures by major servicers and investors,” McMaken said. “This means a year-over-year comparison will show a large increase in foreclosure, but it does not mean that the real estate markets have deteriorated in that time to the same extent.”
U.S. foreclosure rise 6%
Nationwide, RealtyTrac showed 308,524 foreclosure filings – default notices, scheduled auctions and bank repossessions – 6 percent above the level reported in February 2009.
“The 6 percent year-over-year increase we saw in February was the smallest annual increase we’ve seen since January 2006, when we began calculating year-over-year increases, but it still marked the 50th consecutive month of year-over-year increases in foreclosure activity,” said James J. Saccacio, chief executive officer of RealtyTrac. “This leveling of the foreclosure trend is not necessarily evidence that fewer homeowners are in distress and at risk for foreclosure, but rather that foreclosure prevention programs, legislation and other processing delays are in effect capping monthly foreclosure activity — albeit at a historically high level that will likely continue for an extended period.
“In addition, severe winter weather appears to have temporarily slowed the processing of foreclosure records in some Northeastern and Mid-Atlantic states.”
Foreclosure activity by type
Default notices (Notices of Default and Lis Pendens) were reported on a total of 106,208 U.S. properties during the month, an increase of 3 percent from the previous month but down 3 percent from February 2009. Default notices were down 25 percent from their peak of more than 142,000 in April 2009 but were still more than three times the number they were four years ago in February 2006. Foreclosure auctions (Notices of Trustee’s Sale and Notices of Sheriff’s Sales) were scheduled for the first time on a total of 123,633 U.S. properties, a decrease of 1 percent from the previous month but still 16 percent higher than the level reported in February 2009. Scheduled auctions were down 14 percent from their peak of more than 144,000 in August 2009 but were also about three times higher than the number reported in February 2006. Bank repossessions (REOs) were reported on a total of 78,683 U.S. properties during the month, a 10 percent decrease from the previous month but an increase of 6 percent from February 2009. Bank repossessions were down nearly 15 percent from their peak of more than 92,000 in December 2009 but were at nearly twice the level reported in February 2006.
Nevada, Arizona, Florida post top state foreclosure rates
Nevada foreclosure activity decreased nearly 7 percent from the previous month and was down 30 percent from February 2009, but the state’s foreclosure rate continued to rank highest in the nation for the 38th month in a row. One in every 102 Nevada housing units received a foreclosure filing during the month — more than four times the national average. Arizona and Florida documented nearly identical foreclosure rates, with one in every 163 housing units receiving a foreclosure filing in both states. Despite a nearly 21 percent decrease in foreclosure activity from the previous month, Arizona’s rate was statistically slightly higher than Florida’s rate and ranked second highest among the states. California’s foreclosure rate ranked fourth highest among the states, with one in every 195 housing units receiving a foreclosure filing during the month, and Michigan’s foreclosure rate ranked fifth highest among the states, with one in every 226 housing units receiving a foreclosure filing.
Other states with foreclosure rates among the nation’s 10 highest were Utah (one in every 275 housing units), Idaho (one in 296), Illinois (one in 305), Georgia (one in 331) and Maryland (one in 407.)
6 states account for 60% of foreclosures
Six states account for more than 60 percent of national total in February. California led the way, with 68,562 properties receiving a foreclosure filing during the month — down nearly 5 percent from the previous month and down 15 percent fromFebruary 2009. Foreclosure activity in Florida increased nearly 15 percent from the previous month and was up more than 16 percent from February 2009. The state continued to post the nation’s second highest total, with 54,032 properties received a foreclosure filing during the month. Increasing foreclosure activity boosted Michigan’s total to third highest among the states. A total of 20,028 Michigan properties received a foreclosure filing during the month — up nearly 14 percent from the previous month and up 59 percent from February 2009. With 17,312 properties receiving a foreclosure filing, Illinois posted the fourth highest total, followed by Arizona, with 16,718 properties receiving a foreclosure filing, and Texas, with 12,638 properties receiving a foreclosure filing in February. Other states with totals among the 10 highest in the country were Georgia (12,177), Ohio (11,286), Nevada (11,035), and Maryland (5,732).
Divergent trends
Metro areas in the Sun Belt states of Nevada, Florida, California and Arizona continued to dominate the top 10 highest foreclosure rates among metropolitan areas with a population of 200,000 or more, but activity trends in these areas varied considerably. The Las Vegas metro area documented the highest metro foreclosure rate, with one in every 90 housing units receiving a foreclosure filing during the month, despite a 9 percent decrease in foreclosure activity from the previous month. Six of the other metro areas in the top 10 — all in California or Arizona — also reported decreasing foreclosure activity from the previous month. The biggest monthly decrease among the top 10 was in the Phoenix metro area, where foreclosure activity dropped nearly 18 percent. In contrast, the two Florida metro areas in the top 10 both posted substantial monthly increases in foreclosure activity. The Cape Coral-Fort Myers metro area saw a 31 percent increase in foreclosure activity from the previous month, giving it the second highest metro foreclosure rate — one in every 92 housing units receiving a foreclosure filing. An increase of nearly 66 percent in foreclosure activity from the previous month helped boost the foreclosure rate in Port St. Lucie to sixth highest.
Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.
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