Colorado Attorney General John Suthers will be honored next month by Brothers Redevelopment for his support of the Colorado Foreclosure Hotline.

The nonprofit Brothers Redevelopment will recognize Colorado Attorney General John Suthers and a number of other individual and organizational “housing heroes” during the agency’s 40^th Anniversary celebration in October.

Suthers is being recognized for his efforts to support the Colorado Foreclosure Hotline, which is managed by Edgewater-based Brothers.

Suthers and the others will be recognized during “Opening Doors: Celebrating 40 years of Housing with Brothers Redevelopment,” from 5:30 to 9 p.m. Thursday, Oct. 6, at the Denver Merchandise Mart, located at 451 E. 58^th Place.  Comedian Josh Blue will headline the event, which will be hosted by popular KOSI 101 morning personalities Denise Plante and Murphy Huston, and feature a networking reception, dinner and a live auction of several artfully adorned doors and fun activities.  The event is presented by Key Sponsors FirstBank and Pillar Property Services, LLC.

Denver's own Josh Blue will perform at Brother Redevelopment's 40th anniversary fest next month.

The cost is $65 per ticket.
In all, ‘Brothers’ will bestow six awards on key individual and organizational contributors, including:

• Sustainability Salute: Colorado Attorney General John Suthers -Since 2008, Suthers has been instrumental in sustaining foreclosure prevention counseling for thousand of homeowners across Colorado.  Thanks to the efforts of the Attorney General and his staff, Colorado has received substantial funding via a settlement with a major mortgage servicer—the majority of which has been directed to fund the Colorado Foreclosure Hotline and its affiliate agencies.  The Attorney General and his staff have also worked with housing counseling agencies across Colorado to alert consumers about the dangers and prevalence of loan modification and other mortgage-related scams.
• President’s Housing Preservation Award: Mennonite Housing Development Corp. - In 2010, the nonprofit Mennonite Housing Development Corporation donated $917,500 to Brothers Redevelopment to apply toward the purchase of the 81-unit William Tell Apartment complex—a federally subsidized independent living complex that houses low-income elderly and disabled tenants. In doing so, the MHDC helped Brothers Redevelopment preserve affordable housing in Central Denver.
• Local Government Champion: Sue Corbett, Brighton Senior Center - As the Director of the Brighton Senior Center, Sue Corbett has been the driver/champion for Brighton Help for Homes—an event that taps into the spirit of service that exists in the growing north metro community to annually serve up to two dozen low-income senior and disabled homeowners.  Corbett works cooperatively with the staff from Brothers Redevelopment to coordinate the event–from fundraising to recruiting volunteers to enlisting and qualifying the senior homeowners who benefit from the program.   Since 2005, Brothers has teamed with Corbett and the city of Brighton to help more than 140 homeowners save tens of thousands in minor, but essential, exterior home repairs.
• Outstanding Local Government Partner: City of Thornton -Since 2002, Brothers has served as the primary partner for the City of Thornton’s Help for Homes Program—an initiative that leverages federal Community Development Block Grant funds to assist the city’s low-income homeowners.  With Brothers Redevelopment as the program’s primary contractor, more than 120 homeowners have received all manner of minor and emergency home repair—from water and furnace replacement to the installation of grab bars in bathtubs and showers.  The successful program has turned into a model for several other metro area communities, including Northglenn, Sheridan, Westminster and others.
• Volunteer Vanguard: PCL Construction - For more than a decade, hundreds of employees from Denver-based PCL Construction have descended on the home of a Brothers Redevelopment Paint-A-Thon client to make significant improvements and save clients thousands in home repairs.   Painting is but a portion of PCL’s contribution to the agency’s senior and disabled clients, as the construction crew also can be counted on to fix and renovate porches, replace siding, build fences and stair rails, repair windows and doors, fix gutters, improve the landscape, trim trees and shrubs, and haul away large items.
• Outstanding Foundation Partnership: Daniels Fund - Throughout its history, Brothers Redevelopment has been fortunate to find support from many caring foundations, including the Daniels Fund. Brothers Redevelopment has directed these funds to its Home Maintenance and Repair Program, an initiative through which the agency helps hundreds of clients with physical and financial limitations complete a variety of repairs that improve their in-home safety and mobility.  Over the past decade, The Daniels Fund has served as the agency’s largest foundation partner—providing more than $300,000 in funding to help the agency fulfill its mission.

In addition to recognizing key supporters, Brothers Redevelopment will use the event to showcase an unprecedented level of service for Colorado’s homeowners.  With the help of community and corporate sponsors and tens of thousands of volunteers,‘Brothers’ through four decades has met the housing needs of more than 83,000 low-income, elderly and disabled clients.

Today, ‘Brothers’ provides housing for more than 575 senior and disabled tenants at 12 independent living complexes in the metro area; provides home maintenance and repair to elderly and disabled homeowners to improve their in-home safety and mobility; oversee the Colorado Foreclosure Hotline; recruits thousands of volunteers to stage an annual Paint-A-Thon for seniors; and provides pre-purchase, reverse mortgage and default counseling to thousands of homeowners annually.

Collectively through these programs, the agency directly serves more than 4,000 clients each year.  Through its efforts to preserve housing accessibility, affordability and safety, Brothers has become a highly credible partner for local officials looking address and overcome some of the region’s most pressing housing challenges.

Tickets may be purchased at Brother’s website at this link. The event’s Paint Brush-level sponsor is the Niesen-Borth Agency.  Additional support for the event is provided by PCL Construction and the Colorado Housing and Finance Authority.  Sponsorships opportunities also remain available. Call 303-202-6340 for more information.

Contact John Rebchook at JRCHOOK@gmail.com

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In the first quarter of 2010, 34,336 Colorado homeowners were pinning their hopes on keeping their homes out of foreclosure through the Obama Administration’s flagship program to help people keep their homes.

In the first quarter of 2011, only 5,017 Colorado homeowners were in the required “Active Trials” portion of the Home Affordable Modification program, better known as HAMP, according to an InsideRealEstateNews analysis of data released today.

That’s a 85.4 percent drop.

Much of the big reduction is by design.

In mid-2010, the Treasury Department advised servicers to pre-screen homeowners entering the program, because such a large percentage of them were not qualifying for permanent modifications, which can lower mortgage rates to as low as 2 percent.

Nationally, borrowers in the permanent program have saved $5.9 billion in lower mortgage payments. Savings by Colorado homeowners equates to an estimated $82.6 million, according to an InsideRealEstateNews calculation.

In March, a record-low 1,597 homeowners in Colorado entered the active trial, a 3.7 percent drop from the previous low in February. However, a record 8,222 homeowners are in the permanent modification program, an increase of  395 people from February.

“Fantastic news”

“That is fantastic news,” said Shannon Peer, Housing Counseling director at Brothers Redevelopment, which is in charge of the Colorado Foreclosure, 1-877-601-HOPE.

Although some politicians and real estate officials have been calling for the elimination of HAMP, or a major overhaul of the program, Peer is not in that camp.

“Especially not with what we are seeing with March numbers,” Peer said. “Helping 400 people keep their homes is incredible. We’ve been noticing that during the last six or eight months, typically the number of people entering the permanent part of the program has been consistently in the 235 to 250 range, so this is a pretty big jump.”

Banks increasingly helping

Beyond that, counselors at Brothers Redevelopment have been noticing that many people turned down by HAMP, have seamlessly been moved into proprietary programs offered by the banks.

“That was always supposed to happen, but the reality was that it was not always the case in the past,” Peer said. “I think the servicers are more efficient in moving people into proprietary programs than they have been in the past.”

The huge drop of people entering the program from a year ago does not bother Peer.

“We anticipated a big drop in the number of people in the active trials,” Peer said. “Now, if you are accepted into the trial period, there is a very strong correlation that you will be accepted into the permanent program.”

Unemployment the culprit

Also, HAMP originally was designed to help people with extremely high mortgage rates that they couldn’t afford.

“Now, of course, the problem is with people who are unemployed or under-employed,” Peer said. “We’re seeing a big increase in servicers moving people into forbearance programs, which buys them time. Many people who are facing losing their homes do eventually find work, and can start making payments again.”

However, no matter how low the mortgage rate, HAMP will not help some people with no or very little income.

“Sometimes is it jus a timing problem, when you’re applying for HAMP,” Peer said.

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Colorado Attorney General John Suthers has awarded the Colorado Foreclosure Hotline $600,000.

Colorado Attorney General John Suthers announced today that his office has awarded the Colorado Foreclosure Hotline a two-year, $600,000 grant to allow the nonprofit to continue its mission of helping homeowners avoid foreclosure.

“The Colorado Foreclosure Hotline is the best resource available for consumers facing foreclosure,” Suthers said. “It is free and has a proven record of helping homeowners in distress assess their options and make an informed choice. This grant will help keep this resource available for the next two years as Colorado continues to experience historically high levels of foreclosures across the state.”

Mortgage fraud fines fund grant

The grant, which starts in July, will be funded from the fines and penalties the Office of the Attorney General has recovered as part of its recent settlements with Countrywide Financial Corporation and Wells Fargo to resolve allegations related to mortgage fraud. The use of the funds from each settlement is directed by court orders.

The Colorado Foreclosure Hotline, established by the Colorado Foreclosure Task Force and managed by the nonprofit Brothers Redevelopment, serves as a network of more than two dozen HUD-approved housing counseling agencies. The agencies work with homeowners in or facing foreclosure. Homeowners who call the free hotline can speak with a housing counselor in their community about the options. In many cases, these counselors may also serve as an intermediary between the borrower and the mortgage loan servicer.

Hotline fields 3,000 calls monthly

On average, the Hotline’s four-member team receives roughly 3,000 calls per month. More than 132,000 Coloradans have called the hotline since its inception in 2006. The network’s counselors have helped more than 25,000 Coloradans better understand their options and work to either avoid or not fall into foreclosure.

“On behalf of the thousands of struggling homeowners and the many caring housing counselors and agencies that comprise our active network, Brothers Redevelopment is grateful to the Attorney General and his staff for their strategic use of these resources that will continue to help households and stabilize communities across Colorado,” said Mary Ann Shing, president of Brothers Redevelopment.

The grant extends the successful partnership of the Colorado Foreclosure Hotline and the Office of the Attorney General. The Attorney General’s Office, working in conjunction with the Colorado Division of Housing, has made extensive funding available to the hotline over the past two years. Over the past six months, the Office of the Attorney General has worked with the hotline on the national Loan Modification Scam Alert Campaign — an extensive statewide outreach campaign to make homeowners aware of the predatory and illegal practice.

Consumers with questions can the Colorado Foreclosure Hotline at 1-877-601-4673 or visit the Web site at www.coloradoforeclosurehotline.org. For more information on the Office of the Attorney General’s work to combat foreclosure and mortgage fraud, visit the office’s Mortgage Fraud Information Center. Consumers who believe they have been the victim of mortgage or foreclosure fraud can file a complaint with the Office of the Attorney General via www.coloradoattorneygeneral.gov/complaint.

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Rep. Angela Williams discusses her bill that would require banks to pay $250 each time they file a foreclosure, as other advocates of the bill participate in a press conference on the steps of the state Capitol.

Watch video and vote in a poll at the end of this blog.

Two Colorado legislators, a housing counselor and religious leaders on Sunday unveiled plans to raise millions of dollars each year to fight the state’s foreclosure crisis.“Starting today…we are going to start foreclosing on foreclosures,”  Zachary Urban, director of Housing Counseling at the Adams County Housing Authority, said at a  press conference on the west steps of the State Capitol.

Urban has been working behind the scenes for the past year on the idea to charge banks $250 for each foreclosure they file to help fund additional foreclosure funding, which is the key component of House Bill 11-1136. The $5 million to $6 million in additional funding from the legislation, if it become law, among other things, will be used to hire another 50 HUD-trained counselors, bringing the total to about 130. Rep. Angela Williams, (D-Denver) is sponsoring the legislation.

Colorado first

“This is unique to Colorado,” Urban told InsideRealEstateNews. “It’s the first of its kind in the country.” He said it is possible that it could be embraced by other states, and serve as a national model

“The surprising that is that the banks are supporting it,” Urban said. “One reason is because it is not only good for consumers who are facing losing their homes in foreclosures, but it is good for banks, because foreclosure are very expensive for them. Every house that does they can keep from going into foreclosure, saves them money.”

Also, the $250 fee is a “direct cost of doing business for them,” so the banks and other mortgage lenders can ask investors in the mortgage to directly reimburse them for the $250, he said. The Colorado Bankers Association, as well as the Independent Bankers of Colorado, already have endorsed the bill. The legislation also has been introduced to the Colorado Mortgage Lenders Association, Urban said. “The initial response has been positive, but it requires a vote of the board,” he said.

Bi-partisan support expected

Following the press conference, Rep. Williams said she doesn’t anticipate much, if any opposition, to the bill. “I can’t really see any opposition, especially since the legislation is getting support from the lenders themselves,” Williams said. “I know when I was campaigning and walking door-to-door in neighborhoods, foreclosures are still a very big deal for a lot of people.”

Urban said he expects the bill will enjoy bi-partisan support. “Most of the funding for foreclosure counseling has come from the federal government,” Urban said. “I think that any Republican worth his salt would like that this is being funded from private banks, and that the banks are on board with the idea. It would become a cost of doing business for banks. If they want to file a foreclosure, they would have to pay the $250.”

Foreclosure hotline lauded

The money raised would be allocated to the Colorado Division of Housing, and various agencies could ask for funding, based on their needs, Urban said. The division created the Colorado Foreclosure Hotline.

During the press conference, Williams urged people in danger of losing their homes to call the hotline at 1-877-601-HOPE. She said there were more than 40,000 new foreclosure filings in Colorado last year, and Colorado remains ranked in the top 10 in foreclosure filings. According to RealyTrac, about one out of every 40 homes in the state is in some stage of foreclosure.

However, 80 percent of the people who call the foreclosure hotline and meet with a counselor, avoid foreclosure. That does not mean that they will stay in their home. In many cases, the best alternative is a short sale, in which the lender accepts less then the mortgage. A short sale costs the bank less money than a foreclosure and typically does not hurt the consumer’s credit history as much as a foreclosure.

She said said the hotline, counselors such as Urban, and religious leaders such as the Rev. Leon Emerson, pastor of the Now Faith Christian Church, who attended the press conference, are providing “critical suport.” However, more needs to be done, she said.

“Times remain tough and man Coloradans are still teetering on the edge of a housing emergency,” Williams said. “We know what works and we’re making progress, but there’s a lot more to do.”

An important step forward in fighting foreclosures is HB-11-1136, she said.”By placing a small fee on banks up front, the bill will provide critical resources to foreclosure prevention efforts conducted by housing counseling agencies approved by the United States Department of Housing and Urban Development.”

Urban noted that because the money will pay the salaries of another 50 HUD counselors, “this is also a job-creation bill.”

Ferrandino seeks 90-day time out

Meanwhile, at the press conference,  Rep. Mark Ferrandino, (D-Denver), also discussed a bill that he introduced to give responsible borrowers a 90-day “time-out” to work with their lenders to avoid foreclosures.  HB 11-1023 unanimously passed in committee last week and this coming week will be heard on a second reading on the House floor.

He noted that he worked on the bill three years ago, and it was approved by legislators and signed by then Gov. Bill Ritter. However, that bill only required the 90-day time out to be in effect for two years. “We were all hoping that the foreclosure crisis would be behind us by then,” he said. “Unfortunately, it is not.” His current bill extends the 90-day time out to 2014.

“Foreclosures can bring on eviction, homelessness, and families forced to live with relatives, among other things,” Ferrandino said. “This is not the way to achieve the American Dream and Democrats are committed in finding ways to help folks going through foreclosure.”

Emerson, who in addition of being a pastor, is a top official at the Greater Metro Denver Ministerial Alliance, which represents more than 60 churches, said he “applauds” both pieces of legislation.

He said many in his congregation are losing their homes because they lost their jobs, they are having personal or health problems, “and, yes, in some cases because they signed bad loans. We know what needs to be done and what works. But we can’t do it alone.”

Video: Zachary Urban explains proposed foreclosure law.

Note: There is a poll embedded within this post, please visit the site to participate in this post's poll.

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The  Colorado Coalition for the Homeless, won the People’s Choice award, while the others received the group’s Eagle awards. Since 1990, Eagle awards have been given to “celebrate extraordinary accomplishments and outstanding leadership in housing and support services across the state.”

Housing Colorado said the 2010 Eagle Award winners “exemplify leadership, innovation and commitment within the wide-ranging housing needs in our communities from transitional and permanent housing for homeless individuals and families, counseling for homeowners facing foreclosure and affordable rental and homeownership opportunities for hard-working families.”

And the winners are…

Following are summaries and responses regarding the winners:

HomeAid Colorado (Organization Category)

HomeAid Colorado is a statewide nonprofit that provides housing to temporary homeless and those at risk of becoming homeless. Since 2000, HomeAid Colorado has completed 31 new housing units for the homeless, two facility renovation projects and the creation of a new community garden for families. Currently, HomeAid Colorado has a project under construction that will serve temporarily homeless families who are homeless for the first time.

“We are so proud of this award. It shows that the good charitable work of our in kind home building industry partners has been recognized by the greater affordable housing community. We thank Housing Colorado for this meaningful award and look forward to completing many more projects to help give the transitionally homeless a second chance.” Laura Brayman, Executive Director, HomeAid Colorado

Colorado Foreclosure Hotline

The Colorado Foreclosure Hotline was established in 2006 as a means of providing easy access for Colorado homeowners to foreclosure prevention services. The Hotline has kept the door open to homeownership for more than 19,000 families. Reaching a positive resolution in the loss mitigation process with the homeowner is also a positive resolution for the lender, the homeowners’ community and the children living in the home.

“To be selected for the Eagle Award among so many amazing and important programs is beyond words,” said Stephanie Riggi, Manager, Colorado Foreclosure Hotline. “The honor is reflective of the hard work and passion of many individuals, government agencies, and private and nonprofit organizations in Colorado committed to the preservation of homeownership for thousands of struggling Colorado families. Most importantly, as a first of its kind and most successful Foreclosure Hotline in the nation, our program is especially proud of the more than 80 HUD-approved housing counselors that comprise our robust network and who have helped more than 25,000 homeowners understand their options, negotiate solutions, and find the best resolution for their particular circumstances.”

John Parvensky, Colorado Coalition for the Homeless (Individual Category / 2010 People’s Choice Award)

The Colorado Coalition for the Homeless works collaboratively toward the prevention of homelessness and the creation of lasting solutions for homeless and at-risk families, children, and individuals throughout Colorado. The Coalition advocates for and provides a continuum of housing and a variety of services to improve the health, well-being and stability of those it serves. Since its founding almost 25 years ago, the organization has earned state and national recognition for its integrated healthcare, housing and homeless support programs.

John Parvensky, President and CEO of the Colorado Coalition for the Homeless since 1986, has spearheaded the development of more than ,400 affordable housing units in the Denver Metropolitan area. John is a renowned affordable housing advocate. He has been active in creation of ground-breaking federal legislation and model programs in the arena of homeless prevention and assistance.

“I am delighted and honored to receive the Eagle Award and the 2010 People’s Choice Award, and do so on behalf of everyone at the Colorado Coalition for the Homeless and those we serve,” Parvensky said. “This award is a reflection on our extraordinarily dedicated employees and volunteers who work tirelessly to improve the lives of the most vulnerable people in our state.”

Thistle Communities (Organization Category)

Thistle Communities provides permanently affordable rental and ownership homes for working families, seniors and people with disabilities. Thistle’s Home Ownership Program provides homebuyer education and counseling to 900 people per year. Thistle also provides quality apartments for working families. Thistle owns and manages a total of 784 permanently affordable rental homes at 15 sites in Boulder, Longmont and Northglenn.

“We were nominated for the Eagle Award by Edwina Salazar of the OUR Center in Longmont; the nomination focused on Thistle’s long history of providing affordable housing, particularly in partnership with other agencies to help some of the more disadvantaged members of the community,” said Mary Roosevelt, CEO, Thistle Communities. “Because the nomination came from one of our Longmont partners, it is particularly gratifying and indicative of the respect our peers and colleagues have for us. The award is for all our work in Boulder, Longmont and Northglenn. The biggest recognition should go to our staff, because it really is reflective of their hard work, fairness and consistency over the last few years.”

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HUD Regional Director Rick Garcia unveils a $41.3 million program to help distressed homeowners in Colorado who have suffered a drop in income, as Shannon Peer and Mary Ann Shing of Brothers Redevelopment watch. Shing is the president and CEO of Brothers and Peer is its housing counseling director.

Colorado will receive almost $41.3 million under the federal government’s attempt to help struggling homeowners facing foreclosure, Rick Garcia, U.S. Department of Housing and Urban Development Region VIII director announced today.

Colorado ranks No. 10 in funding of the 32 state and Puerto Rico sharing in HUD’s $1 billion Emergency Homeowners Loan Program, or EHLP, that Garcia unveiled today at a press conference at the non-profit Brothers Redevelopment’s headquarters in Edgewater.

Tool to fight foreclosures

“Obviously, the Emergency Homeowner Loan Program is only important tool in our toolbox as we fight to continue our nation’s economic recovery,” Garcia said. “And it won’t help every family struggling to keep their home. But with new funding and a new commitment to helping responsible homeowners who have fallen on tough times, President Obama, our local leaders and I believe we can tackle tough challenges. We can fight foreclosure and unemployment. And we can help our communities recover.”

Qualifications laid out

To qualify for the new program, which Garcia said will become effective in December:

• Borrowers must be at least three months delinquent in their payments and have a reasonable likelihood of being able to resume repayment of their mortgage payments and related housing expenses within two years.
• The property must be the principle residence of the borrower, and eligible borrowers may not own a second home.
• The borrower must have suffered at least a 15 percent reduction income and have been able to afford their mortgage payment prior to the event that triggered the lost income.

The new emergency loan program will provide a forgivable, deferred payment “bridge loan,” to qualified borrowers. It will be a zero-interest loan, non-recourse, subordinated loan. Non-recourse means that the borrower is not personally liable, and if there is a default, the lender’s only recourse it to take over the underlying property.

HUD will delegate key program administration functions to the non-profit NeighborWorks America, a national network of affiliated counseling agencies. Nonprofit housing counselors who are part of the National Foreclosure Mitigation Counseling Program will coordinate counseling, preparing documents, and outreach. HUD will use NeighborWorks to contract with loan servicing groups, which handle the day-to-day functions of handling things such as collecting mortgage payments.

In addition, state housing finance agencies that operate similar programs will receive allocations to fund emergency loans for borrowers.

Government helping market

When InsideRealEstateNews asked Garcia about critics who claim that the housing market would recover faster it the government stepped aside and let the market heal itself, Garcia said that, “I think largely the market probably is designed to heal itself.” However, the government does “feel some responsibility to stabilize communities,” as the foreclosure spiral impacts not only the impacted borrowers, but can lower property values and hurt entire neighborhoods.

“Most important of all is that these resources reach the families and communities that need it the most,” Garcia said. The EHLP is combined with the Treasury Department’s “Hardest Hit” initiative, which combined provides a {$8.6 billion investment that will ultimately help a broad group of struggling borrowers across the country.”

Funding for the EHLP comes from the Dodd-Frank Wall Street Reform and Consumer Protection Act.

One size doesn’t fit all

Shannon Peer, manager of housing counselors at Brothers Redevelopment, said that calls to the Colorado Foreclosure Hotline, 1-877-601-HOPE, continue at record levels.

“And the main reason we are most people are calling today, and probably for the last eight to 12 months, is because of unemployment or some loss of income,” Peer said. He said that is why they are pleased to have “this new tool” to help distressed homeowners. While he welcomes the program, “there is no single fix to this crisis,” Peer added.

Zach Urban, spokesman for the Adams County Housing Authority, said he worries the new program will help lenders more than homeowners. “It’s sounds to me like a $1 billion payday for lenders,” Urban said. But he said the jury is still out on the program until more details are released. “If it does help homeowners, then I am in favor of it,” he said.

Stephanie Riggi, manager of the Colorado Foreclosure Hotline, agreed.

“I wouldn’t say I’m skeptical,” Riggi said. “I think for our counselors to have more options to offer to homeowners is always a good thing. We just don’t have a whole lot of details yet.”

Contact John Rebchook at JRCHOOK@gmail.com

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Based on an average loan size of of $188,349, since the hotline was launched in October 2006, HUD-approved housing counselors have helped 21,530 of 23,48 clients they have met in person, about a 92 percent success rate with those who have completed the counseling process.

Dollar value even surprises insiders

The $4 billion figure may surprise people.

“It surprised us,” said Stephanie Riggi, manager of the hotline. “We did the math and we knew it was going to be a big number, but not the magnitude of it.”

Riggi said that one of the immediate benefits, in addition to the homeowners, is to the lenders, which held the loans that were in danger of taking back. Foreclosures are very expensive to banks.

“”That’s $4 billion in bank loans that were kept off their books as bad loans,” she said.

Finger-pointing played down

Riggi said one reason that the hotline has been successful, is that it is a collaborative effort with a large number of players.

“We work together,” Riggi said. “It’s easy to point fingers or blame everyone from the homeowner to the lenders. But instead of assigning blame, what we do is try to resolve the issue. That means homeowners, lenders, Realtors, and government entities, like the Colorado Division of Housing, are all working together.”

“That is excellent news,” said Ryan McMaken, of the Colorado Division of Housing, which helped launch the hotline at 877-601-HOPE, which has been heralded as the first of its kind in the country, as well as one of the most successful in the nation.

“To put that $4 billion in perspective, the median price of a home in Colorado is about $200,000, so by that measure it is the equivalent of keeping 20,000 of homes out of foreclosure,” McMaken said.

That is about the equivalent of every house in a city the size of Littleton.

“Another way to look at it, $4 billion it is about 60 percent of the $7 billion discretionary Colorado state budget,” McMaken said.

Other comparisons to help you get your arms around $4 billion: You could buy 8 million Ipads, or 1.4 million top-of-the-line Prius’s, or 139,178,885 shares of BP with the money.

Keeping homes out of foreclosure, of course, is an immediate benefit to the homeowners in question. But the over-all impact is more far-reaching.

For one thing, it will help stabilize home prices in Colorado, compared to other states, said economist Patty Silverstein, of Development Research Partners.

McMaken agreed.

Other states in worse shape than Colorado

“I think when the final analysis is done, and Colorado fared better than most states in maintaining values during this housing crisis, the long-term affect could to make Colorado more attractive to lenders and cheaper rates for consumers,” McMaken said. “Clearly, there already is a large benefit to the financial institutions that hold these loans in their portfolios. Now they have performing loans.”

But that doesn’t mean that the original homeowners are still in the homes. Increasingly, more of these homes are ending up as short sales, in which the lenders take less than the mortgage amount.

Still, just getting lenders to work with borrowers is a big improvement, McMacken said.

“If you go back to 2006 and 2007, financial institutions were very reluctant to do any kind of loan modification program,” McMaken said. “It used to mystify us why they seemed willing to let the home fall into foreclosure, which was a very expensive proposition, rather than modify the interest rate and continue to make money on the loan.”

Part of the reason likely has to do with accounting rules, which forced banks to immediately take a loss on the difference between the original interest rate and the lower one. Also, McMaken notes that banks did not have loss mitigation workforces in place to deal with the huge volume of distressed real estate, as this was the first nationwide housing price collapse since the Great Depression.

Also, federal housing programs such as the Making Home Affordable Program were not yet in place.

Hotline a national model

Ron Woodock, a member of the Colorado Foreclosure Prevention Task Force and the Colorado Housing Counselor Coalition, said that the hotline is a model for other states.

“I often talk about how I came here from Florida, and I still don’t think Florida has a hotline like this, even though the foreclosure problem there is many, many times worse than here in Colorado,” said Woodcock, a broker with RE/MAX Southeast.

Woodcock said he doesn’t think that many people are aware of the $4 billion impact of the hotline. And some people in real estate and mortgage industries privately are skeptical that the hotline is providing the punch it claims.

“This has been one of the beefs I have had with people,” Woodcock said. “An amazing amount of people do not think that the foreclosure impact has had any impact or should even exist. That’s a bunch of crap. The truth is, it has been amazing. I have been involved with it since its inception in 2006 and I have been up to my eyeballs with every aspect of the housing crisis in Colorado. I have to tell consumers: Don’t try to do it on your own. Call the hotline and speak with a HUD-counselor. If you don’t, good luck. You will be thrown into the lion’s den.

The Colorado Foreclosure Hotline can be reached at 877-601-HOPE. It is managed by Brothers Redevelopment in Edgewater.

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

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Since October 2006 when the Adams County Housing Authority joined in a statewide foreclosure prevention effort, local housing counselors have helped 2,000 clients avoid foreclosure in some capacity. The $370 million dollar volume is based on an average of $188,349 per loan. That is almost 10 percent of the $4 billion in mortgages saved since the Colorado Foreclosure Hotline, 1-877-601-HOPE, was launched.

Cost-effective solution

Executive Director Don May today shared the impact to the local economy with his housing counseling team.

“The team of housing counselors we have here in Adams County have been working diligently with homeowners across the county and with lenders across the country to insure the impact from this current foreclosure crisis is reduced as much as possible,” May said. Not only is $370 million a big number, but it is cost-effective, as the cost of the program is typically less than $300 per homeowner, May said.

“Knowing that the costs of this foreclosure prevention program can be leveraged to net such an amazing rate of return is an important rebuttal to those who would say let the homeowners fend for themselves,” May said.

Homeowners in Adams County can receive free housing counseling to avoid foreclosure from the Adams County Housing Authority either through a bi-weekly workshop or through individual counseling.

$4 billion savings statewide

In $4 billion overall savings, including the $370 million in Adams County, are important to the overall housing market, as providing important social and psychological benefits, said economist Patty Silverstein.

“Assuming that, indeed, these numbers are correct, I think that the impact on the entire metro region economy is quite significant,” said Silverstein, principal of Development Research Partners in Littleton. “First, it has helped to keep our home prices relatively more stable than in other parts of the country. But beyond that, it is just good for the overall economy to keep people in their more and not have them lose it. It plays into everything from the individual family’s psyche to helping them re-allocate their spending patterns. If they can keep their home out of foreclosure, they can remain productive contributors to the economy. How you put a value on that is hard to measure. But it certainly helps the overall market remain stable.”

Foreclosures infect like a fast-moving virus

When homes fall into foreclosure, it not only hurts individual households, but the homes around them, which can bring down the value of entire neighborhoods. Empty homes can become magnet for crime and graffiti, for example.

“Certainly, if someone loses their home in foreclosure, there are lots of negative multiplier impacts,” Silverstein said. “I’m not sure you can say that is moves you into a positive realm as far as multipliers if their homes do not go into foreclosure. I think it is more of a case of maintaining one’s positive momentum.”

Advice free to consumers

U.S. Department of Housing and Urban Development–approved housing counseling agencies,such as the Adams County Housing Authority, offer free advice for homeowners who are facing financial difficulty and are concerned about losing a home to foreclosure. Housing counseling uses solution-based methodology to find the most sustainable option for each individual homeowner, including loan modification; short sale; forbearance and repayment plans; and other potential workouts.

Housing counselors also assist borrowers in communicating with mortgage companies regarding hardship and potential workout options. Many national lenders have given housing counselors at the Adams County Housing Authority special phone numbers to call when they have a client who needs their case escalated beyond general customer service.

For more information on the Adams County Housing Authority, visit www.adamscountyhousing.com.

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

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The statewide hotline on Tuesday, which was launched in October 2006, broke the 100,000 barrier on Tuesday. It has been averaging 180 calls per day. Hotline staff members have seen call volume rise exponentially. It really took off in late 2007.

“Our calls have increased by more than 60 percent in the past two years,” said program manager Stephanie Riggi. “And with new programs in place that promote the hotline, like last year’s house bill 1276, we continue to see high call volume each month.”

The hotline receives between 3,500 and 4,000 calls each month, a pattern that began and held in August 2008 after the implementation of HB 1276, the foreclosure deferment bill. Homeowners who may be eligible for the program are notified via posting on their property. The posting directs homeowners to the Hotline in both English and Spanish.

Riggi and hotline staff use call volume numbers to measure public awareness of the Hotline.

“One hundred thousands calls doesn’t mean 100,000 people have utilized our services,” she explained. “About 20 percent of people who call the hotline come in for a counseling session. But it does mean that we’re continuing to reach a larger population.”

Despite continual rises in call volume, the Hotline and its 26 non-profit HUD-approved partner agencies have handled the increase. Of those callers who choose to meet face-to-face with a Hotline counselor and complete the counseling process, 80 percent reach a positive resolution. Positive resolutions include but are not limited to loan modifications, refinancing, and selling the property.

“Homeowners should not be ashamed to reach out for help,” Riggi said. “Our services are free and confidential. Concerned homeowners are calling us, they’re meeting with housing counselors, and they’re finding those options that work best for them.”

To schedule an appointment with a housing counselor, call 1-877-601-HOPE (4673). For more information, visit this link.

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

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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

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.

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