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Colorado foreclosures in February fell by 18 percent from a year earlier, but the state still remains on a Top 10 list it wants no part of – it was No. 9 for its foreclosure rate last month, according to the most recent RealtyTrac report.
The report by the Irvine, Calif.-based company found that last month, one out of every 515 households in Colorado was in some stage of foreclosure. That compares with a national rate of one out of every 577 homes in some stage of foreclosure, ranging from the first notice of a pending foreclosure to when when the property is acquired by the lender at the public trustee auction and it become a REO (Real Estate Owned) property.
“It doesn’t look like there’s been much change in Colorado’s place in the national rankings since last month,” said Ryan McMaken, of the Colorado Division of Housing, who plans to release his own foreclosure report for February on Tuesday. “Colorado continues to linger somewhat near the national foreclosure rate. Given the larger economic picture, I certainly don’t see any reason why Colorado’s foreclosure picture should necessarily be improving compared to the nation, especially considering January’s employment numbers for Colorado.”
Colorado’s unemployment rate in January was 9.1 percent, compare with the national average of 9.0 percent. The latest unemployment numbers reverses a trend in which Colorado’s unemployment rate was slightly lower than the national average.
MBA paints better picture
However, McMaken noted that the Mortgage Bankers Association shows Colorado faring much better than overall nation, as far as delinquent loans, an early indicator of foreclosures. “Naturally, I continue to be unable to reconcile Realtytrac’s high ranking for Colorado to the MBA’s low ranking, but looking beyond that, I have to largely agree with the trends that are featured in (RealtyTrac’s) report,” McMaken said.
The Mortgage Bankers Association’s National Delinquency Survey shows 5.9 percent of mortgage loans in Colorado were past due in the fourth quarter of 2010, compared with an 8.9 percent rate nationally. The MBA report showed that Colorado had the eighth-lowest rate of loan delinquency in the fourth quarter and ranked 10th for the lowest rate of serious delinquency, which the MBA defines as loans 90 days or more past due and loans in foreclosure.
McMaken said the next report from the housing division will likely show a “large decrease in February as well, no doubt reflecting the trends discussed (by RealtyTrac.) It seems that Colorado has certainly not been exempt from the drop in foreclosure activity described in the Realtytrac report. This makes it harder to make overall inferences about the state of the housing economy, although we can note that February’s low totals are part of a larger decline in new foreclosure activity that has been showing up since late 2009.”
National YOY drop larger than in state
While the RealtyTrac report shows just over an 18 percent drop in filings in February from February 2010 and a 16.17 percent drop from January for Colorado, the year-over-year decline is far below the national drop of 27 percent, although it was better than the U.S. month-to-month drop of 13.86 percent. Overall, the RealtyTrac showed a total of 4,207 properties with foreclosure filings in Colorado in February.
Nationally, in February, there were 225,101 properties with foreclosure filings, which included default notices, scheduled auctions and bank repossessions — were reported on 225,101 U.S. properties in February. That marked the largest year-over-year decrease since RealtyTrac began issuing its report in 2005.
“Foreclosure activity dropped to a 36-month low in February as allegations of improper foreclosure processing continued to dog the mortgage servicing industry and disrupt court dockets,” said James J. Saccacio, chief executive officer of RealtyTrac. “While a small part of February’s decrease can be attributed to it being a short month and bad weather, the bottom line is that the industry is in the midst of a major overhaul that has severely restricted its capacity to process foreclosures. We expect to see the numbers bounce back, but that will likely take several months. And monthly volume may never return to its peak in March 2010 of more than 367,000 properties receiving foreclosure filings.”
Foreclosure Activity by Type
A total of 63,165 U.S. properties received default notices (NOD, LIS) for the first time in February, a 16 percent decrease from the previous month and a 41 percent decrease from bFebruary 2010. Default notices hit a 48-month low in February and were 55 percent below a peak of 142,064 in April 2009.
In states with a judicial foreclosure process, default notices decreased 19 percent from January and were down 48 percent from February 2010. In states with a non-judicial foreclosure process, default notices decreased 13 percent from January and were down 31 percent from February 2010.
Foreclosure auctions were scheduled for the first time on a total of 97,293 U.S. properties in February, a 10 percent decrease from the previous month and a 21 percent decrease from February 2010. Scheduled foreclosure auctions hit a 27-month low in February and were 38 percent below a peak of 158,105 in March 2010.
Scheduled judicial foreclosure auctions decreased 7 percent from January and were down 49 percent from February 2010. Scheduled non-judicial foreclosure auctions decreased 11 percent from the previous month and were down 7 percent from February 2010.
Lenders foreclosed on 64,643 U.S. properties in February, down 17 percent from January and down 18 percent from February 2010. Bank repossessions (REOs) hit a 22-month low in February and were down 37 percent from their peak of 102,134 in September 2010.
Bank repossessions in states with a judicial foreclosure process decreased 24 percent from January and were down 35 percent from February 2010, while bank repossessions in states with a non-judicial foreclosure process decreased 14 percent from January and were down 8 percent from February 2010.
Nevada, Arizona, California were the states with the highest foreclosure rates. Nevada posted the nation’s highest state foreclosure rate for the 50th straight month, with one out of every 110 housing units having a foreclosure filling last month. In Arizona, it was one out of every 178 households and in California, one out of every 239 households.
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