Home sales in the Denver area in June dropped by 31.4 percent from a year earlier, as the tax-credits that drove brisk activity in the first four months of the year screeched to a halt. It was the largest year-over-year decline for a June on record. June marked the second consecutive month of a huge drop in contract activity. In May, under contracts fell by about 41 percent from April and 27 percent from May 2009.There were 3,885 homes placed under contract in June, down from 5,664 in June 2009. Last month’s activity marked the fewest number of home contracts in a June since 2003, when 3,218 homes were placed under contact, shows the report by independent broker Gary Bauer, based on Metrolist Inc. data.

Tax-credits front-loaded sales

Local real estate experts agree that the $8,000 first-time tax credit and $6,500 for some existing homeowners, boosted sales in the first third of the year. But they disagree on whether the tax credits were a good idea.

“We borrowed from the future and now it has caught up with us,” said Mike Rinner, of the Genesis Group, which tracks housing along the Front Range. He said clearly, a lot of people who might have bought in May and June, signed on the dotted line earlier in the year to get the tax credits.

He also said it’s possible that the strong spring sales, fueled by the tax credits, also will impact sales that would have occurred at the end of the summer and into the fall. “We just don’t know yet,” Rinner said.

In the first half of the year, there were 28,395 homes placed under contract, a 2.2 percent drop from the 39,040 homes placed under contract in 2009. And 2009 was one of the weakest years on record for home sales in the Denver area. Because of the mix of home sold, however, the average price of a single-family home rose to $299,375 in June from $273,285 in May and $283,312 in June 2009. The median price of a single-family home rose to $244,000, from $230,00 in May and $237,500 in July 2009.

Asked if he thought the tax credits represent good fiscal policy, Rinner said: “My whole thing is that markets will heal when they have a chance to clear. We saw that in northeast Denver. It was hit earlier by foreclosures, but the market has since cleared, and now supply and demand are nearly in balance,” although he said home prices are down perhaps 40 percent from their pea.

He said that politicians could feel better about themselves by implementing the tax credits, at a time when the country was suffering from the first nationwide downturn in housing values since the Great Depression.

“It’s like the morning after you had a night out on town and drank too much,” Rinner said. “Do you lie in bed feeling sorry for yourself, or do you get up, exercise a little bit, and try to avoid feeling bad all day? There are no easy answers.”

Credits served their purpose

But Bauer said the tax credits were worth it, despite the huge decline in their wake

“Yes, the frenzy of the first-time home buyer is gone,” Bauer said. ” I definitely think the tax credits were good. I hate to use the term, stimulus, but that the housing market did need help, and the tax credits did help the market. It did help some people get off the fence to buy a home, who might otherwise not have bought. What we are seeing now, I believe, is the beginning of the true prime home buying season.

Chris Mygatt, president of Coldwell Banker Residential Realty Colorado, also thought the tax credits were a good thing.

“I think the hope was that they would create some momentum in the market that could be sustained after they were gone,” Mygatt said. “And I think it boosted sales and would have created momentum. But I think you have to look what happened independent of the tax credits. It may look like we sold eight months worth of homes in the first four months of the year, but you have to consider the financial crisis in Europe and Greece and the oil spill in the Gulf. They seem unconnected to the real estate market in Denver, but they put people on edge. People do not make decisions as big as buying a home when they are worried about the future.”

Mygatt said even more people would have bought homes before the tax credits expired on April 30, but they couldn’t find the right home, because the supply of unsold homes was so low.

The irony is those who did not buy, but are still house-shopping, are in an even more attractive market, Mygatt said. Interest rates are at a record low and there is a larger selection of homes to choose from. At the end of June there were 23,240 unsold homes on the market, 11.4 percent more than the 20,853 in June 2009 an 5.6 percent more than the 22,016 in May.

“People who are looking to buy now are really in a good place,” Mygatt said. “I wouldn’t be surprised if we don’t see some increased activity in under contacts in July.”

Without a doubt, the tax credits pushed home sales to the first part of the year, said Stephanie Prather, a broker/owner with 8z Real Estate, a sponsor of InsideRealEstateNews.

“In my 20 years in the business, I had never seen anything like it- I thought I was going to go crazy,” Prather said. “The phone wouldn’t stop ringing from clients calling who wanted to get the $8,000 tax credit.”

Tax credit folly

But she didn’t mince words about the worth of the tax credits. She thinks they were a mistake.

“I think anything arbitrary is a mistake,” Prather said. “It is a phony thing. The buyers who used the tax credits, would have bought anyway, so it was a waste of taxpayer money. I do not think it was necessary. All it did was provide a brief spark to the real estate market. It did not solve any problems. People just bought a little sooner than they would have. Sure, the tax-credits helped some first-time home buyers to get off the fence, who might have been too frightened to buy without them. But those who were truly frightened, wouldn’t have bought anyway.”

She said she realized many of her fellow brokers may disagree with her, but she said she has to call them as she sees them.

“I’m always extremely honest,” Prather said. “You can’t sugar-coat things.”

But Jeff Bernard, a broker with RE/MAX Alliance  and a business consultant, said he thinks the tax credits did help the housing market and the economy.

“The tax credits for home buyers, in my estimation, provided positive stimulus that helped stabilize the housing industry, and help stimulate the local and national economy,” Bernard said. “I disagree with those who say stimulus just pushes the problem down the road. History has proved time-and-time again that stimulus is an effective economic tool.”

Sales drop puzzling

The steep year-over-year drop in under contracts does surprise Bernard, however.

“The home affordability index is still so favorable for potential buyers that it’s counter-intuitive to me that anyone considering a home purchase would not move forward on that decision,” Bernard said. “Low interest rates and bottoming home prices are clearly the prime time to purchase. Maybe it wasn’t logical to purchase a home in early 2008, but it seems illogical to not buy now if it’s a qualified buyer who wants to own a home. I’m a real estate analyst; I’m not selling homes. But I strongly believe one should consider buying a home now if owning a home is on a buyer’s radar screen. So this sharp drop inactivity is puzzling to me.”

Year	Under Contacts	Closings	Unsold homes	Median Price of single-family homes
2002	2,773	3,914	21,538	$225,000
2003	3,218	4,875	26,533	$230,164
2004	6,643	5,590	28,043	$243,000
2005	6,511	5,511	25,817	$251,500
2006	6,049	5,628	31,900	$261,750
2007	6,136	5,129	30,256	$263,000
2008	6,308	4,845	26,104	$230,000
2009	5,664	4,186	20,853	$237,500
2010	3,885	4,046	23,240	$244,000

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

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Denver-area home prices rose an average of 4.4 percent in April from April 2009, marking the sixth consecutive month of year-over-year gains, shows the closely watched S&P Case-Shiller Home Price Indices released today.

The 4.4 percent gain was the largest since the trend began in November 2009, when prices were up 0.5% from November 2008. Each month, the percentage gain has grown.

Still, the 4.4 percent was only good for eighth place of the 20 metropolitan statistical areas tracked by Case-Shiller, as other markets, which previously had shown greater losses than Denver, are now enjoying greater percentage gains. San Francisco showed the biggest gain, rising a whopping 18 percent from April 2009.

Increases may continue

“I think the increases are sustainable,” said Gary Bauer, an independent broker who completes his own monthly report using Metrolist data.

The Denver market, as the nation as a whole, was helped in April as buyers and brokers scrambled to put homes under contract by April 30 to quality for a federal tax credit worth as much as $8,000.

“I think we are going to see much lower increases going forward,” Bauer said. “I do think the Denver market should get a lot of credit for six continuous months of year-over-year increases. But I do think the tax credits helped Denver and every other market in the country. I do think the trend is continuing, but at a much smaller proportion.” Qualified buyers who are seeking the tax credits have until the end of Wednesday to close on the homes.

May figures will be telling

But Tom Cryer, a broker withe the Kentwood Co. is not so sure how sustainable the entire home sales market remains in the wake of the end of the tax credits.

“I can tell you my first response is, “I can’t wait until we see the May figures,” Cryer said. “That will be the end of our six-month run. Absolutely. The front desk is all-knowing and all-seeing. We all have had fewer showings since April 30 and if you don’t have any showings, you don’t have any contracts.”

On the other hand, because Case-Shiller tracks appreciation, and not the number of sales, the end of the tax credits could bode well for Denver, he said. Case-Shiller uses “paired sales” of single-family homes to avoid the “price drift,” or the potential of bigger homes entering the market and skewing the data.

Low-priced homes no longer driving market force

“If you figure that the tax credits did not impact the move-up or move-down market very much, but primarily had an impact on the low-end of the price range, now, moving forward, those people at the lower-rung of the market, no longer have incentives to be part of the market,” Cryer said. “Could that mean that as we go forward, the bottom of the market has been taken away? Here is my updated prediction: The average price of a home cold go up, now that the bottom has been taken away, but the number of transactions will go down.”

Also, with fewer transactions, big sales will have a disproportionate impact on the overall numbers, he said. For example, a broker in his office recently put a home under contract for $2.8 million, which previously had been listed at $5 million.

“One $2.8 million sale makes up for a lot of $150,000 transactions,” Cryer said.

Case-Shiller doesn’t tell you what your home will fetch

Cryer said that while reports such as Case-Shiller “make for interesting conversations and I love to hear about and discuss this kind of stuff,” the truth is that it has little to do with what any individual can fetch for his or her home.

“Real estate is still a Main Street kind of business,” Cryer said. “Clearly, we have some blocks and enclaves in the Denver area that are just still performing very poorly. And we have other enclaves that are so hot you can drive through them and hardly see a For Sale sign. It’s all about “location, location, location,” while 60 days ago it was “timing, timing, timing,” when the the tax credits were still available.

Stephen Holben, a custom home builder, agrees with Cryer that real estate is very local

“As I have expressed before, (Case-Shiller) has nothing to do with the value of anybody’s property,” said Holben, principal of Holben Building Corp. “But it has been embraced as though it does, so what can you do? If it helps people function again, post on a billboard. I’ve been in this biz for almost 40 years, and I’ve never seen people behave as they are these days. We’re into year six of what I call The Great American Housing Beatdown.”

On a national level, “Home price levels remain close to the April 2009 lows set by the S&P/Case Shiller 10- and 20-City Composite series,” said David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “The April 2010 data for all 20 MSAs and the two Composites do show some improvement with higher annual increases than in March’s report. However, many of the gains are modest and somewhat concentrated in California. Moreover, nine of the 20 cities reached new lows at nsome time since the beginning of this year. The month-over-month figures were driven by the end of the Federal first-time home buyer tax credit program on April 30th. Eighteen cities saw month-to-month ngains in April compared to six in the previous month. Miami and New York were the two that fared the worst in April compared to March. New York is the only MSA to have posted a new relative index lows  with April’s report. Other housing data confirm the large impact, and likely near-future pullback, of the federal program.” He added that May data separate from Case-Shiller shows a “sharp declines in existing and new home sales and housing starts. Inventory data and foreclosure activity have not shown any signs of improvement. Consistent and sustained boosts to economic growth from housing may have to wait to next year. ”

Metropolitan Area	Change from January 2000	Change from March to April	1-Year Change
Atlanta	5.64%	1.8%	0.2%
Boston	53.56%	1.4%	4.9%
Charlotte	16.05%	1.1%	-2.2%
Chicago	20.43%	0.6%	-1.6%
Cleveland	4.77%	1.4%	6.8%
Dallas	18.14%	2.0%	3.3%
DENVER	27.5%	1.7%	4.0
Detroit	-32.19%	0.2%	-3.0%
Las Vegas	2.82%	0.2%	-8.5%
Los Angeles	71.78%	0.7%	7.8%
Miami	45.04%	-0.8%	-0.5%
Minneapolis	18.89%	1.8%	9.5%
New York	68.95%	-0.3%	-1.0%
Phoenix	10.05%	0.5%	5.4%
Portland	46.25%	1.8%	-0.4%
San Diego	61.39%	0.7%	11.7%
San Francisco	38.77%	2.2%	18.0%
Seattle	44.15%	1.0%	-2.8%
Tampa	37.09%	-0.5%	-2.4%
Washington, D.C.	79.49%	2.4%	7.3%
Composite-10	57.37%	0.7%	4.6%
Composite-20	44.56%	0.8%	3.8%

Month	YOY Change
November 2009	0.5%
December	1.2%
January 2010	2.6%
February	3.6%
March	4.1%
April	4.4%

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Heather Parness is the new president of Perry & Co.

Vote at the bottom of this blog on whether you think Perry & Co. was smart in hiring Erin Toll.

Perry & Co. has a new president.

Heather Parness has been promoted to the  president of the 60-agent company with three offices.

Parness, who joined Perry & Co. Real Estate Professionals last September as the company’s managing broker been working in a leadership role for the past nine months with a focus on assisting agents in their work with clients, recruiting agents for the company’s long term growth and serving as a key player on the management team in setting a course for the company’s future.

R. Don Larrance, co-founder of the company in 1971, and its president since 2000, will remain in a leadership and management role as the company’s chief executive officer. Since Parness joined Perry & Co. several new agents and staff members have also come on board at its three offices located in Cherry Creek North, Cherry Creek East and Greenwood Village.  Perhaps most prominently, Erin Toll, the former director of the Colorado Division of Real Estate, recently joined Perry & Co. as an agent in its Cherry Creek North office.

“These past nine months have been a great boost of energy, enthusiasm and growth at our company with Heather as our managing broker,” Larrance said. “Her depth of knowledge about real estate, her passion for the business and her appreciation of our company culture make her the perfect choice for Perry & Co. She’s such a part of our family now, this is the right move at the right time for all of us.”

Parness said she believes that Perry & Co. is the oldest residential real estate company that has been continuously under one ownership in Denver. “I’m pretty sure it is,” Parness said. “It’s a 38-year-old company and Don has been involved in the ownership since the beginning and has been the head of the company for the past 35 years, I believe. For me, that was a real big draw. I think a lot of brokers like working at a boutique, locally owned company with a lot of continuity. I think a lot of consumers like that, too. Our stats show that 84 percent of our business is repeat business.”

Because she has been with the company for the past nine months, she said she and Don have had extensive discussions about the short-term and long-term game plans. Her goal is to increase the size of the company by a third.

“Eighty brokers in our three offices would be the sweet spot,” Parness said. “We think that is a really good-size for a boutique, niche firm.” She said they typically hire veteran brokers from other companies, with one or two brokers new to the industry.

In that latter category, of course, would be Toll, who joined soon after her $55,000 settlement of her legal actions against the state. She had been placed on a paid leave of absence in March, and later filed whistle-blowing actions regarding her former boss at the Department of Regulatory Agencies.

“I was very much involved in hiring Erin,” Parness said. “I have not directly heard one negative comment about her hiring. Some people may have made negative comments, but not directly to me. All of the feedback I have received has been very positive.”

On the other hand, she is not Pollyanish about hiring  Toll. “I know Erin was controversial at times at her job as director of the real estate division and I know the circumstances that led to her departure were somewhat controversial,” said the 38-year-old Parness, a Greeley native who has spent her entire adult-life involved in residential real estate. “I’ve known Erin for maybe 2 1/2years of her three years or so as the head of the division. I really like and respect the changes she brought to the industry. She took steps that were badly needed and she did a good job.”

Staff applauds Parness

Agents and staff broke into spontaneous applause at the company’s weekly sales meeting when the announcement was made. Parness noted that her career began right out of high school an unlicensed sales person in Greeley, and over the years she has been an agent, manager and head of Information Technology for companies. “There is no job in real estate I haven’t done,” she said.

“I am thrilled, humbled and completely ready to step into this position,” said Parness, who served as President/COO of a competitor, Fuller Sotheby’s International Real Estate Denver for almost five years, before joining Perry & Co. “To follow in Don’s footsteps is a daunting enterprise. He is beloved and is the heart and soul of Perry & Co. Don will continue to be a great mentor, and contribute to the future strategy.”

Perry & Co. brokers are representatives of Leading Real Estate Companies of the World, a consortium of 600 of the top privately-held real estate companies in 30 countries leading all national brands in total units sold.

Independent broker Gary Bauer has known Parness “off and on” since she was a branch manager of the Perry & Butler Cherry Creek office in the late 1990s. Perry & Butler- no relation to Perry & Co . – was sold to NRT, parent of Coldwell Banker, in 2001.

“Heather is a very dynamic individual,” Bauer said. “She would make a great president of a company the size of Perry & Co. Heather is very customer-service oriented, she is progressive, she is very strategic and tactical. And frankly, she knows how to get a long with a wide variety of people and gets things accomplished.  I congratulate her.”

Asked if he thought it were a risk for Perry & Co. to hire Toll, Bauer said it is premature to tell how she will work out.

“I’m sure several companies would have given Erin a complimentary interview, but would not hire her,” Bauer said. “Not every agents is right for every company. I look at Erin and she will face the same challenges as any newly licensed individual. I think with the appropriate mentoring, she could do well. She is a self-starter. It could be a great decision on or could be a bad decision. It is too early to tell.”

Parness, however, noted that Toll has hit the ground running.

“Erin has been with us for just under two weeks,” Parness said. “She is very hard-working, focused and has a business plan. She took a call off the floor and converted it into an under-contract. I couldn’t be happier.”

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

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In the Denver-area buyers, placed 6,616 homes under contract last month, a whopping 27.6 percent increase over the 5,183 homes placed under contract in April 2009, shows a report based on Metrolist statistics released today by independent broker Gary Bauer. There were 4,188 closings, a 23.5 percent increase over the 3,390 a year earlier, although that was not a record for April.

“Every statistic during the month of April gave an indication that April would be a record month and it was.” Bauer said. ‘It was absolutely a frenzy during the last three days of April. Some Realtors kept their offices open all the way to midnight. Sellers, especially at the lower-end, were receiving multiple offers for their homes, and buyers had to be making offers on multiple homes. It was absolutely amazing.”

Buyers need to close by June 30, to get the tax credits.

Deals don’t die with credits

Much as auto dealers did after the cash-for-clunkers program ended, many sellers will continue to offer deals to buyers in order to keep the home buying momentum going, he said.

“Selective home sellers will work with buyers to make sure buyers get the equivalent of the tax-credits,” Bauer said. “And a number of new home builders will make sure you get the equivalent of the tax credit, whether it is in the form of helping you with closings costs, buying down your loan, or upgrades.”

The market still has too many foreclosures and short sales, but May appears to have started out on a strong note, he said. “I think we are going to see positive activity, if not great activity, for the rest of the summer,” Bauer said, although closings are sure to be strong.

Most tax credits used by 1st-time buyers

Chris Mygatt, president of Coldwell Banker Colorado, said all of his offices saw a “flurry of activity” during the last week of April, so he wasn’t surprised that there were a record number of contracts written for an April. He noted the market experienced a similar surge last November, when many consumers thought Congress would not extend the tax credits.

Mygatt estimated that 85 percent to 90 percent of the people taking advantage of the tax credits are first-time buyers, with the remaining 10 percent to 15 percent of the buyers current homeowners, who are either moving up or downsizing. Mygatt said there was so much demand for lower-priced homes that it has driven up prices, and reduced the supply of the lowest-price homes.

Despite that, the average price of a single-family detached home sold and closed last month rose 7.8 percent to $274,253 from $254,442. And the median price of a single-family home rose 9.5 percent to $230,000 from $210,000 in April 2009.

“Part of that is the homes at the bottom of the scale rising in value with demand, and part of it is that we are increasingly seeing higher-priced homes selling,” Mygatt said.

Rising inventory encouraging

Mygatt also is enthused that the number of unsold homes in the market last month rose 4.2 percent to 21,565 from 20,705 in April 2009.

“That is the first month in almost three years that we have seen a year-over-year increase from the same month,” Mygatt said. “In the last couple of years, any good Realtor was advising clients not to put their homes on the market, if they really didn’t have to sell. Now, as the market is getting better, there is a lot of pent-up demand from sellers. ”

Mygatt expects a large percentage of the homes in the pipeline will close.

“The buyers really want to take advantage of that tax-credit money, so they have an incentive to do everything they can to close,” Mygatt said. “And since most of them are first-time home buyers, their deal is not contingent on them selling a home,” which often is what causes home deals to fall apart.

Billion dollar month

Last month, buyers bought about $1.05 billion in homes, 32.6 percent more than the $791.5 million in homes purchased in April 2009.

“When we see a lot of home-sale activity that bodes well for other facets of the economy,” said economist Patty Silverstein, principal of Development Research Partners in Littleton. “When people move into a new homes they need to purchase furnishings and things. First-time buyers especially need to buy lawnmowers and shovels and all type of things, so the spin-off effect goes through the entire economy. And you can’t ignore the whole universe of people involved in the process – title insurance people, inspectors, mortgage people, real estate brokers.”

Broker urged buyers not to wait until deadline

Chris Behrens, a broker with New Era Realty, did help a buyer put a home under contract near the end of April, “but for me, it was not so much of a flurry.”

Behrens said he had been urging prospective buyers to prospective buyers to find their dream home before weeks, or even months, before the April 30 deadline.

Even though is is human nature to wait until the 11th hour to pull the trigger, he said he spent a lot of time educating buyers on the advantages of not waiting until the last minute.

“I wanted people to buy homes when we still had a good supply of homes for first-time buyers,” Behrens said. “I told them that we are going to run out homes at those prices, and that is what happened. A lot of the low-priced homes have been gobbled up. I know some fix and flippers who were buying homes at $80,000 or $90,000, doing nice renovations, and then selling then homes for $160,000, and even $200,000 or more.”

Still, not all is lost for buyers who didn’t meet the deadline. The $8,000 tax credit isn’t the sole reason for buying a home, he said. In other words, it didn’t make sense to settle for a home that would make you unhappy just to land the tax credit.

“Some of the people I am working with are emotionally resigned themselves to the fact that they could not find something in time to take advantage of the tax credits,” Behrens said. “But is not all about the $8,000. If you look at what a 1 percent move up in interest rates will do to your costs, that has a more expounding impact on you than the $8,000 over the life of the loan, or even after a few years. Interest rates are still low, I think employment is going to pick up a bit, and more sellers are listening to their Realtors on pricing their homes to sell. So there will still be opportunities out there.”

Year	Under Contract	Closed	Unsold Homes	Average price s-f home	Median price s-f home
2010	6,616	4,188	21,565	$274,253	$230,000
2009	5,183	3,390	29,705	$254,442	$210,000
2008	6,287	4,265	26,171	$267,259	$222,550
2007	6,173	4,399	27,858	$322,510	$248,000
2006	5,813	4,300	29,045	$318,949	$250,000
2005	6,240	4,461	24,164	$307,308	$245,000
2004	3,338	4,432	26,584	$284,853	$231,000
2003	2,497	3,823	24,972	$275,213	$227,037
2002	2,999	4,162	13,590	$259,705	$218,230
2001	3,183	4,242	12,727	$250,385	$209,970

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

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High Noon Entertainment would like to hear from homeowners who:

Own their own home and live in the Denver area.

Have a remodel project already planned.

Have a compelling story about why they need to renovate.

Are physically capable of completing the renovation.

Have the time available and can commit to a firm completion deadline. (about 4 to 5 weeks total project time)

Have an appropriate budget already set aside for the renovation.

Are enthusiastic about being on TV and are ready to put their skills to the test.

High Noon Entertainment is offering a $2,500- participation fee to homeowners who complete their home renovation on schedule and within five weeks.

Homeowners are asked to email generalcontractor@highnoontv.com for an application and more information about the show.

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Bank of America is likely to acquire this home in a foreclosure, and sell it for less than the mortgage amount.

Grace spent part of yesterday cleaning her house.

But it was not a typical spring-cleaning.

Instead, the sweeping and scrubbing as a way of saying goodbye to her house, the first she ever owned.

“I want it to look presentable for showings,” Grace said. “Plus, it was the right thing to do.”

Foreclosure sale looms

Grace, 43 and single, who spoke openly to me on the condition I not use her last name, is losing her home in a foreclosure, after months of unsuccessfully trying to modify her loan It’s currently on the market as a short-sale, listed for about 36 percent less than she paid for it less than two years ago. A short sale is when a lender agrees to make less than the amount of the mortgage.

Grace wishes it wasn’t so.

“I love my house. I love my neighborhood. I love my neighbors,” Grace said.

Grace moved to Denver from the Carbondale area in 2008. Even though she did not have a job at the time, she was able to buy the cute little, one-bedroom, one-bath home in the Sunnyside neighborhood in northwest Denver for about $128,000. Anyone who has paid any attention to the stricter loan underwriting, knows that would not happen today.

But she soon found a job in the non-profit sector, where she had worked for the past 20 years.

Almost as quickly, she was laid off.

Job loss root of problem

She told her lender, Countrywide, that she would likely have problems paying her mortgage. She expected to get back on her feet quickly.

“Never did I imagine that I would be out of work for eight months,” she said. “I probably sent out 400 resumes and had maybe five interviews.”

As she fell farther behind on her mortgage payments, she called the Colorado Foreclosure Hotline, 1-877-601-HOPE. The hotline put her in touch with a HUD counselor at NEWSED Community Development.

“I met with a lady at NEWSED,” Grace said. “She had me to gather my information on income and taxes and bank statements. I was calling her every week or so, because I was unable to get a hold of anyone at Countrywide,” which had been bought by Bank of America. “Finally, she stopped calling me back. But I don’t blame her. She was over-loaded with cases similar to mine.”

After she found work, she was four months behind on her mortgage. But there was a ray of hope. She was told by Bank of America that she might qualify through the Obama Administration’s Home Affordable Modification Program, or HAMP.

Through February, 2,613 households in Colorado have received permanent loan modifications through HAMP, as I blogged earlier. (For that blog, please visit this link.) Another 11,707 are in active trials, the first step before getting a permanent loan modification, where interest rates in many cases are initially dropped to 2 percent, for a total of 14,320 in the state.

“I find it surprising that I’m not one of those people,” Grace said. She said based on her gross pay of $38,000 a year, she was deemed as making too much money to qualify for a HAMP modification. On a national basis, Bank of America has 261,216 loan modifications in either active trial or in a permanent status, more than any other loan servicer in the country, according to government statistics.

Grace upside down on loan

But in one respect, simply lowering her interest rate wouldn’t get her on strong financial footing, at least on paper.

Her home, which public records list as having 505 feet of finished space and a 166-square-foot unfinished basement, is being listed as a short-sale for $78,888, according to MLS.

“So even if I got a loan modification, I would still be upside down,” she said.

I asked her if she would like to be able to buy her home for $80,000.

“Yes, I would love that,” she said.

Unfortunately, that is not in the cards. Even in HAMP, lenders seldom lower the principal amount.

She said that the home had been scheduled to go to a public trustee auction sale in February and March, at which time Bank of America would likely own it, but it was delayed.

“I don’t know if it is going to auction on April 1, or it will be delayed again,” she said.

Fears eviction

But she decided with no hope of keeping her home, she didn’t want to risk a sheriff deputy knocking on her door, evicting her and tossing all of her belongings on the front lawn.

“I decided I’m just going to move out,” she said.

And that is what she did last weekend, trading her $919 monthly mortgage for $845 in rent for a slightly smaller house in Wheat Ridge. “There’s really not that much difference between my mortgage and my rent,” she said.

She knows that some people trash their homes when they leave, but she never had any intention of doing that to the little house that she still loves.

Grace said that if anyone finds themselves in her predicament, she would advise them to write down the name and time of everyone they talk to at their lender.

“And be the squeaky wheel,” she said. “I don’t believe you will get anywhere unless you are the squeaky wheel.”

Despite her ordeal, she hasn’t given up on the American Dream.

“I hope to buy another home,” she said. “I’ve been told I’ll probably be able to qualify to buy another home in two years.”

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

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