The report showed 17,087 homes in some stage of foreclosure, ranging from the initial notice to the REO, or Real Estate Owned, when the bank acquires the home at a public trustee foreclosure auction. In the Denver area, 1.62 percent of the homes were in some stage of foreclosure, compared with 1.28 percent for the nation. One out of every 62 households was in some stage of foreclosure, while the national average was one out of 78. In the first six months of the year, the foreclosure rate rose by 9.3 in the Denver area, compared with an 8.26 percent for the nation.

Greeley’s foreclosure rate worse than Denver’s

Greeley was No. 29, with 2,334 foreclosures, a foreclosure rate of 2.58 percent, and one out of every 40 households in some stage of foreclosure. It matched the year-over-year percentage change of the nation as a whole, at 8.26%

The report also ranked Colorado Springs as No. 53 and Boulder at 136.

Across the country, 154 of the 206 MSAs with a population of at least 200,000, posted year-over-year increase in foreclosure activity, according to RealtyTrac. Four states — Florida, California, Nevada and Arizona — accounted for all top 20 metro foreclosure rates. Florida led the way, with nine of the top 20 metro foreclosure rates, followed by California with eight, Nevada with two and Arizona with one.

Recovery fragile

“While we’re seeing early signs that foreclosure activity may have peaked in some of the hardest-hit markets, foreclosures continued to rise in three-quarters of the nation’s metropolitan areas in the first half of the year,” said James J. Saccacio, chief executive officer of RealtyTrac. “The fragile stability achieved in many local housing markets hinges on improvements in the underlying economy, specifically job growth. If unemployment remains persistently high and foreclosure prevention efforts only delay the inevitable, then we could continue to see increased foreclosure activity and a corresponding weakness in home prices in many metro areas.”

Top metro foreclosure rates

Las Vegas continued to post the nation’s highest metro foreclosure rate in the first half of the year, with 6.60 percent of its housing units (one in 15) receiving a foreclosure filing — more than five times the national average. A total of 53,525 Las Vegas properties received a foreclosure filing during the six-month period, a decrease of nearly 15 percent from the previous six months and a decrease of nearly 9 percent from the first half of 2009.

Foreclosure activity in the Cape Coral-Fort Myers, Fla., metro area decreased nearly 22 percent from the previous six months and was down nearly 30 percent from the first half of 2009, but the metro area still documented the nation’s second highest metro foreclosure rate — 4.98 percent of its housing units (one in 20) received a foreclosure filing during the six-month period. Other Florida cities in the top 10 were Orlando-Kissimmee at No. 8 (4.15 percent of housing units) and Miami-Fort Lauderdale-Pompano Beach at No. 10 (3.89 percent).

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

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The report showed there were 30,177 properties in some stage of foreclosure through June. That equates to one out every 71 homes, which is close to the national average of one out of every 78 homes in some state of foreclosure, from the initial filing to REO (Real Estate Owned) when the bank takes back the home.

The number of homes in foreclosure in the first six months of the year have risen 13.6% compared to the same period in 2009. Nationally, the increase was 8.26 percent, according to the Irvine, Calif.-based company.

Nationally, it reported 1.96 million foreclosure filings on 1.654 properties, which is a 5 percent decrease in properties from the previous six months. In the previous six months, from July to December 2009, foreclosure activity in Colorado fell by 9.1 percent.

“The second quarter was a tale of two trends,” said James J. Saccacio, chief executive officer of RealtyTrac. “The pace of properties entering foreclosure slowed as lenders pre-empted or delayed foreclosure proceedings on delinquent properties with more aggressive short sale and loan modification initiatives. Meanwhile the pace of properties completing the foreclosure process through bank repossession quickened as lenders cleared out a backlog of distressed inventory delayed by foreclosure prevention efforts in 2009.

“The midyear numbers put us on pace to exceed 3 million properties with foreclosure filings by the end of the year, and more than 1 million bank repossessions,” Saccacio added. “The roller coaster pattern of foreclosure activity over the past 12 months demonstrates that while the foreclosure problem is being managed on the surface, a massive number of distressed properties and underwater loans continues to sit just below the surface, threatening the fragile stability of the housing market.”

Colorado not out of the woods

Ryan McMaken, of the Colorado Division of Housing, which tracks foreclosures in Colorado using a different methodology than RealtyTrac, said that Saccacio’s observations mirror what he is seeing.

“The trends for new foreclosure filings (in Colorado) are encouraging, but the number of completed foreclosures continues to show few signs of a fast decline,” McMaken said. “Their mixed total of filings and completed foreclosures for the first half of the year is at a rate that reflects what I’m seeing, and I would be surprised to see any big swings in foreclosure data right now. Foreclosure activity in the state continues to move along a high plateau that may be coming down slightly, but there are few indications that numbers will move rapidly upward or downward very soon.”

But he said that RealtyTrac’s methodology does leave some questions unanswered. “Since Realtyrac doesn’t break out the state trends for the first half of the year between new filings and completed foreclosures, or provide a time series, it’s difficult to say if their local data reflects the same trend,” McMacken said.

Short sale activity grow

Tom Cryer, a broker with the Kentwood Co., recently complete an analysis of Denver-area housing, which he said clearly shows that foreclosure activity peaked in 2008. However, bank foreclosures have been replaced with short sales, in which the lender agrees to accept a sale for less than the mortgage amount.  He described short sales as “thinly veiled foreclosures.” Nationally, Nevada has the highest foreclosure rate, with almost 6 percent of its homes, one in 17, receiving at least one foreclosure filing in the first half of the year, according to RealtyTrac. Arizona and Florida were No. 2 and No.3, respectively.

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

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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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The report by RealtyTrac, based in Irvine, Calif., for the first time released a report tracking third-party sales by banks. The sales, which occur during any phase of the foreclosure process, typically fall into two broad categories, Rick Sharga, spokesman for RealtyTrac told InsideRealEstateNews. The first category is short sales, in which the bank agrees to accept less than the mortgage amount. The second category is after the bank has acquired the home in what is known as a REO (Real Estate Owned) and subsequently sells it to someone else.

In the fall, RealtyTrac plans to start breaking out short-sale data for each state, Sharga said.

An earlier report by the Colorado Division of Housing, showed 6,686 foreclosed homes being sold at public trustee auctions in Colorado during the first quarter.

Tracking short sales

“Our number for total sales is very close to that number,” Sharga said. “With this report, w were looking at third-party, arms-length sales. We did not count the foreclosure sales when the bank was the highest bidder.” Banks often bid the amount of the outstanding loan, as that does not cost them any money out of pocket. Investors can bid more, if they think the house is worth more. Typically, if a house had equity in it – that is the house had value beyond the loan amount – the homeowner would be better off selling the home on the open market. It’s estimated that nationally, one out of every four mortgages is underwater.

“There 4,535 number does still seem surprisingly low,” said Ryan McMaken, of the Colorado Division of Housing, who researches and authors state-wide foreclosure reports. “RealtyTrac is obviously using a different methodology that we do. I think their data will be valuable for future comparisons, rather than the absolute numbers.”

We’re talking $866 million in home sales

According to RealtyTrac, first-quarter, third-party foreclosure sales are down 30.21 percent from the first quarter of 2009 and down 16.79 percent form the fourth quarter of 2009. That is down slightly from the respective national averages of 33.18 percent in the third quarter 2009 and 14.04 percent in teh fourth quarter. The average sales price of a a home was $191,006, about 11 percent higher than the national average of $171,971. The total value of the 4,535 homes is about $866.2 million. The overall average discount was 24.51 percent. In other words, more than $1 billion of homes would have impacted , if they could have fetched market prices. The average REO discount in Colorado was 30 percent, compared with 34 percent for the nation, while the average pre-foreclosure discount was 17.62 percent in Colorado, compared with 14.77 percent for the nation.

“I think Colorado has settled down quite a bit,” Sharga said. “I don’t think they are out of the woods, yet. I think the worst is over, unless you get hit with another wave of unemployment. Colorado does appear to be in danger of that happening, and Colorado seems to be weathering this economic storm better than most places.

McMaken, of the housing division, noted that foreclosure activity was peaking in 2007 in Colorado, at a time when the rest of the nation was just staring to feel the brunt of record numbers of people losing their homes.

National numbers

Colorado accounted for about 2 percent of the 232,959 U.S. properties in some stage of  foreclosure — default, scheduled for  auction or bank-owned (REO) — sold to third parties in the first quarter, a decrease of 14 percent from the previous quarter and down 33 percent from the peak during the first quarter of 2009, when sales of foreclosure homes accounted for 37 percent of all residential sales.

“First time home buyers and investors continue to buy foreclosure properties in large numbers, and at substantial discounts,” said James J. Saccacio, chief executive officer of RealtyTrac. “As lenders have begun repossessing homes at record levels over the first half of 2010, it will be interesting to watch how they will manage the inventory levels of distressed properties on the market in order to prevent more dramatic price deterioration.”

The average sales prices on properties in some stage of foreclosure decreased 23 percent from 2006 to 2009 while the average discounts on foreclosure purchases steadily increased from 21 percent in 2006 to 27 percent in the first quarter of 2010. Discounts on REOs are larger than discounts on pre-foreclosures. However, discounts on pre-foreclosures appear to be trending higher as short sales become more common.

Foreclosure sales increase 2,500 percent from 2005 to 2009 More than 1.2 million U.S. properties in some stage of foreclosure sold to third parties in 2009, an increase of 25 percent from 2008 and an increase of nearly 327 percent from 2007. Total foreclosure sales in 2009 were up more than 1,100 percent from 2006 and up more than 2,500 percent from 2005. Foreclosure sales accounted for 29 percent of all sales in 2009, up from 23 percent in 2008 and up from 6 percent in 2007.

Foreclosures carry 25 percent discount

The average sales price of properties that sold while in some stage of foreclosure in 2009 was 25 percent below the average sales price of properties not in the foreclosure process. That was up from an average discount of 22 percent in 2008 but down from an average discount of 26 percent in 2007. The average foreclosure discount in 2005 was 35 percent, driven by a nearly 50 percent discount on REOs; however, the discount on pre-foreclosures trended up slightly over the same five-year period, from nearly 12 percent in 2005 to 15 percent in 2008 and 2009.

A total of 144,503 bank-owned properties sold to third parties in the first quarter, down 13 percent from the previous quarter and down 27 percent from the first quarter of 2009. REO sales accounted for 19 percent of all sales in the first quarter, up from nearly 16 percent in the previous quarter but down from 21 percent of all sales in the first quarter of 2009. REOs sold for an average discount of 34 percent, up from an average discount of nearly 32 percent in both the previous quarter and the first quarter of 2009.

A total of 88,456 pre-foreclosure properties — in default or scheduled for auction — sold to third parties in the first quarter, down 15 percent from the previous quarter and down nearly 41 percent from the first quarter of 2009. Pre-foreclosure sales accounted for nearly 12 percent of all sales, up from nearly 10 percent in the previous quarter but down from 16 percent in the first quarter of 2009.  Pre-foreclosures, which are often short sales, sold for an average discount of nearly 15 percent, up from nearly 14 percent in the previous quarter but down from 16 percent in the first quarter of 2009.

Nevada, California, Arizona hit hardest

Nevada, California, Arizona posted highest percentage of foreclosure sales in the first quarter, accounting  for 64 percent of all sales in Nevada in the first quarter, the highest percentage of any state, although Nevada’s percentage was down from 65 percent of all sales in the previous quarter and 75 percent of all sales in the first quarter of 2009.

California posted the second highest percentage, with foreclosure sales accounting for 51 percent of all sales there in the first quarter — up slightly from 50 percent in the previous quarter but down from 70 percent of all sales in the first quarter of 2009. Foreclosure sales as a percentage of all sales were also down in Arizona from the first quarter of 2009, but the state still posted the third highest percentage in the first quarter, with foreclosure sales accounting for 50 percent of all sales.

Other states where foreclosure sales accounted for at least one-third of all sales were Massachusetts, Rhode Island, Florida, Michigan, Georgia, Illinois, Idaho and Oregon. Ohio, Kentucky, Illinois had the highest foreclosure discounts.

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

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The number of homeowners in Colorado in active trial modifications – the first step in the federal government’s  $75 billion plan to keep people out of foreclosure – has dropped by almost half since the beginning of the year, shows an InsideRealEstateNews.com analysis.

In May, the latest numbers available, there were 6,423 homeowners in Colorado participating in active trials under the Home Affordable Modification Program, or HAMP, part of the Obama Administration’s  Making Home Affordable Program. That is a 45 percent drop from the  11,708 homeowners participating in HAMP in January and a 28 percent drop from the 8,932 in active trials in April. The number of people in the active trial program has dropped every month  this year in Colorado. New rules have hammered the number of people allowed into the programs, but ultimately should mean more homeowners will stay in it. Nationwide, the programs have been plagued by a huge percentage of people being bounced from the program because they could not afford even loan rates as low as 2 percent, because they did not have the income to qualify for even vastly reduced mortgages.

Permanent Mods Rise

The number of homeowners in the Permanent Modification part of HAMP,  rose 13.8 percent from May to 4,960 from 4,356. However, that was the lowest month-to-month percentage increase this year. The number of  homeowners receiving permanent loan modifications has risen 176 percent since January when 1,797 had received permanent modifications in Colorado.

“I don’t see it working,other than about 25 percent of the time,” said Jack O’Connor, the broker owner of RE/MAX Professionals.

He said many consumers, who have lost their jobs or are grossly under-employed and can’t take advantage of the the super-low mortgage payments offered through the government-backed program.

“Lenders are trying to do the program, as it is the mandate from the federal government, but it is just not a clean enough process to work for a lot of people,” he said.

This spring, the government basically instructed loan servicers – the ones that collect the monthly loan payments – to pre-screen homeowners before they enter the trial program to increase the odds that the homeowner will qualify for a permanent loan modification.

Much more common than loan modifications are short sales, in which the lender agrees to sell the home for less than the mortgage amount, O’Connor said.

Short sales increasing

“Short sales are now increasing and the consumer is more aware their are other options than just a loan modification,” O’Connor said. “And for homes below $250,000, there has been appreciation. So I’m seeing small deficiencies (the difference between the loan amount and the sales price) than in the past. I’m seeing deficiencies of $5,00 or $6,000 and $7,000 – the the $30,000 or $50,000 of a couple of years ago.”

Zachary Urban, spokesman for the Adams County Housing Authority, said that the “most critical aspect” of the drop in trial modifications is the rules change that requires lenders to be more selective in letting consumers into the program.

“”That has punctured the bubble, if you will, of home modifications,” Urban said. And that is a good thing, he said.

“We saw this rise in trial modifications and it was just not sustainable,” Urban said. “I think with the drop in trial modifications, we are also going to see a drop in recidivism rate – in other words, the drop out rate is going to drop. The quality will go up, as the quantity goes down.”

While it may seem like bad news to homeowners who would love to lock in rates as low as 2 percent, it often is not in the best interest of the homeowner, he said.

“The way we look at it is why give more money to the mortgage company when it is a losing proposition? The consumer needs to see that there are options.”

Urban agrees with O’Connor is that there will be a wave of short sales.

‘I think we are going to see a huge spike in short sales,” Urban said. “The rules for short sales are now more efficient, and investors are more willing to accept them. I am seeing a huge appetite for short sales by investors. And by investors, I am talking about mortgage-backed securities. In the past, the investors in these securities were unwilling to accept short sales, but now they are much more willing to pull the trigger on them. The way I look at it, the biggest hurdle in the entire short-sale process was with the investors of the mortgage-backed securities.

Employment key

Shannon Peer, director of counseling at the non-profit Brothers Redevelopment in Edgewater, said loan modifications work best for homeowners who are under-employed, and not unemployed.

For example, if someone had been making $75,000 and is now only making $55,000, the loan modification might be just what the doctor ordered. But if the person loses their job and has no income – or is just collecting unemployment – they most likely won’t qualify for HAMP, he said.

Also, some people will be seeing the so-called “alt-A” adjustable rate mortgages that they took re-set to higher rates in the next year or two, and if they can remain employed, even at lower wages, they could benefit from the government loan modifications.

“And what we are increasingly seeing is the private sector stepping in and offering their own proprietary loan programs outside of HAMP and the Making Home Affordable Program,” Peer said. Some people who are booted out of the government-backed programs, might be thrown a lifeline from the growing number of bank programs, he said. O’Connor said that big lenders such as Bank of America and Wells Fargo are starting to offer pilot programs in some states, which they could expand if they are successful.

And Urban said that even if the majority of people had been bounced from the permanent loan modification programs, that does not mean they are failures.

“I think you need to put it into perspective,” Urban said. “We are talking about billions and billions of dollars in home loans. If 50 percent, or even 70 percent, of the people in the program are dropped, the minority who do benefit represent a big, big dollar amount.”

Month	Active Trials	Permanent Modifications	Total
January	11,708	1,797	13,505
February	11,707	2,613	14,320
March	10,929	3,422	14,351
April	8,932	4,356	13,287
May	6,423	4,960	11,383

MSA	Active Trials	Permanent Modifications	Total HAMP
Boulder	224	149	373
Colorado Springs	637	552	1,189
Denver-Aurora	3,907	3,152	7,059
Fort Collins-Loveland	290	194	484
Greeley	413	319	732
pUEBLO	180	121	301

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The online workshop will help homeowners understand their nine best options when faced with an unaffordable mortgage. Homeowners will also get details on the new government Home Affordable Foreclosure Alternatives Program, or HAFA, which offers those eligible a $3,000 moving allowance after their home is sold.

Fix can help you fix foreclosure fears

“We often find that homeowners in a difficult financial situation will hesitate to reach out to a professional for help and end up losing their home and ruining their credit,” Fix said. “I believe we can help more homeowners avoid foreclosure, and that is very gratifying.”

The latest numbers on mortgage delinquency show that approximately one in every seven mortgages is in some stage of delinquency, nationwide. While they may not be facing immediate foreclosure, these homeowners are more at risk of foreclosure the longer they wait to do something about their missed payments. Even if a homeowner is two or three months away from losing their home,  there is hope.

Nine options

The nine options that will be covered during the workshop are:

1. Reinstatement of your loan. Homeowners have the right to reinstate the loan by bringing the payments current.

2. Forbearance of the loan. The lender may consider partial payments to catch up.

3. Sell the property. You may have equity.

4. Rent the property.

5. Refinance the property.

6. Mortgage modification

7. Deed in Lieu of Foreclosure

8. Bankruptcy

9. Short Sale. This could allow you to sell your home for less than what you owe, and the bank may forgive the rest of your debt. A Short Sale can save your credit.

“Many homeowners may have bought or refinanced at the peak of the real estate market and were able at that time to meet their commitments,” says O’Connor. “But, so many families have had their finances turned upside down by this economy that they’re now in trouble. This workshop will help them find a way out.”

The free workshop is from 7 p.m. to 8 p.m. and will utilize gotomeeting.com. To RSVP, and get more information on the event, call Stephanie Fix at (303) 885-4693, or email her at: sfix@remax.net.

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

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There were 2,633 foreclosure filings in 12 of Colorado’s largest counties in May, a 17.7 percent drop from the 3,198 filings in May 2009, marking the lowest point in foreclosure activity in the past 18 months, shows a state report released today.

The report by the Colorado Division of Housing appears to be the strongest proof yet that the foreclosure crisis that has gripped the state for several years, is finally waning.  However, homeowners losing their jobs remains a dark cloud hovering over the state’s housing market, which could mean that thousands of homeowners will still suffer the pain of losing their homes.

Still, the latest numbers are encouraging.

Surprisingly good news

“I would say it is good news,” said Ryan McMaken, of the Colorado Division of Housing, and author of the report. “It is waning. As far as new foreclosure activity, there is a slow decline.”

McMaken had predicted decline, based on previous foreclosure patterns, an improving housing market, and government and lender programs that that provide help for people about to lose their homes.

“But I was surprised how low the numbers were,” McMaken said. “You could say it was unexpectedly low. The trend, going back to April of last year, overall, has been to go down.”

In the first five months of the year, there were 15,330 foreclosure filings, a 6 percent drop from the 16,310 filings from January to May of 2009.

“That may be more reflective what is happening the market and give a more realistic and accurate portrayal of the market than 18 percent drop from May 2009 to this May,” McMaken said.

Foreclosure sales at public trustee auctions, meanwhile, rose 18.3 percent to 1,459 in May from May 2009, when there 1,233, although they fell 19.2 percent from April, when there were 1,806. Sales represent homes that went into foreclosure many months – and even years – before the home returned to lenders. And the year-over-year difference partially reflects the low number of foreclosure sales that occurred last spring due to last year’s voluntary moratoria on foreclosures, McMaken noted.

Bad economy, not bad loans, the culprit

Zach Urban, of the Adams County Housing Authority, said the bad economy, and not bad loans are driving foreclosure activity today.

Urban researched foreclosure activity in Adams County and found that it was taking an average of 32 months from the the loan originated until the home went into foreclosure. “You have to put this into context,” Urban said. “You can’t have foreclosures, if you don’t have loans. You can’t have a forest fire if you do not have enough fuel to keep the fire growing.”

When Ron Woodcock, a broker with RE/MAX Southeast came to the Denver area from Florida, almost all of his clients were people who could not afford their mortgages, which were adjusting upward. Those loans, such as option-ARMs and other subprime mortgages, have largely worked their way through the system.

“Now, I am working on 17 short sales and every single one is because the homeowner lost their job,” Woodcock said. A short sale is when a lender agrees to accept less for the home than the outstanding mortgage.

Help coming for those who lost their jobs

That is the experience of HUD counselors who man the phones at the Colorado Foreclosure Hotline, said Stephanie Riggi, who manages the hotline at 1-877-601-HOPE..

“A high number of our calls are from people who have decent, fixed-rate mortgages,” Riggi said. “They have lost their jobs or they are suffering from reduced income.”

She noted that the original government programs weren’t designed for homeowners who lost their jobs, but rather to provide assistance to people saddled with loans that were spiralling well above what they could afford, at a time when their home values were dropping.

“But new programs addressing people losing their jobs will go into effect on Aug. 1,” she said. “These are called forbearance programs for people facing financial hardships.’

Broker Woodcock said that homeowners in jeopardy of having trouble making their mortgage payments, should not try to deal with it alone. “There are so many resources available at no cost to people,” Woodcock said. “People who try work it out themselves, are probably setting themselves up for failure. Your much more likely to get some help if you talk with a HUD-approved counselor.”

And Shannon Peer, director of counseling at the non-profit Brothers Redevelopment Inc. in Edgewater, said that it is too early to say that the we have won the war against foreclosures.

“We are still facing such a high level of foreclosures, it is going to b a long period before we are out of the woods,” Peer said.

County	May 2009	May 2010	YTD 2009	YTD 2010
Adams	430	379	2440	2182
Arapahoe	465	410	2402	2346
Boulder	113	97	529	563
Broomfield	28	25	138	130
Denver	489	375	2617	2210
Douglas	199	136	1013	1022
El Paso	468	382	2299	2070
Jefferson	334	315	1622	1638
Larimer	172	129	880	734
Mesa	95	96	346	645
Pueblo	117	114	666	578
Weld	288	175	1358	1212
Total	3198	2633	16310	15330

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Colorado foreclosure activity in May took a breather in May.

Colorado’s foreclosure rate was No. 12 in the nation last month, with foreclosure activity falling 24.1 percent from April and 0.68 percent from May 2009, shows a report by RealtyTrac, a company based in Irvine, Calif., which tracks and markets foreclosure data.

Colorado showed a much bigger drop than the national average, which overall booked a 3.3 percent drop from April and showed a 0.45 percent increase from May.

The last time this year that Colorado was ranked No. 12 was in January. In February it had the 11th highest foreclosure rate in the nation and it was No. 10 in March and April, according to RealtyTrac.

In Colorado, one out of every 444 households was in some stage of foreclosure in May, compared with the national average of one out of every 400 households. There were a total of 4,843 homes in some stage of foreclosure last month, which represents about 1.5 percent of the 322,920 homes nationwide in some state of foreclosure, ranging from the initial notice to REO – Real Estate Owned, which is when the bank takes the home back following the foreclosure sale.

California, Arizona and Florida suffering much more

“The trends here more or less reflect what we’re seeing in Colorado,” said Ryan McMaken, of the Colorado Division of Housing, which tracks foreclosure activity in the Denver area and the state, using a different methodology than RealtyTrac.

“The preliminary state data for May indicates that May foreclosure totals in filings are down compared to last month, and compared to May of last year, McMaken said. “Completed foreclosures will likely prove to be generally flat compared with May of last year.”

He said that Colorado “more often that not,” has been below the national foreclosure rate in recent months. He noted that the Mortgage Bankers Association data, for example, has been showing Colorado in the bottom half of the states for new foreclosure activity.

“It’s noteworthy that the foreclosure rates in California, Arizona and Florida, are more than twice as bad as the foreclosure rate in Colorado, so Colorado certainly shouldn’t be lumped in with these states anymore when it comes to foreclosure activity,” McMaken said.

On a national basis, May “continued and confirmed” a trend of the leveling off of foreclosure activity as “lenders work through the backlog of distressed properties that have built up over the past 20 months,” said James J. Saccacio, chief executive officer of RealtyTrac. “Defaults and scheduled auctions combined increased by 28 percent from 2007 to 2008 and another 32 percent from 2008 to 2009 — creating a build-up of delayed bank repossessions. Lenders appear to be ramping up the pace of completing those forestalled foreclosures even while the inflow of delinquencies into the foreclosure process has slowed.”

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

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Foreclosure sales at auction fell 16 percent from March to April of this year, and rose 45.2 percent from April 2009 to April 2010. The year-over-year increase reflects the very low number of foreclosure sales that occurred during April 2009 due to last year’s voluntary moratoria on foreclosures.

Due to a national moratorium on processing foreclosures put in place in late 2008 and early 2009, foreclosure sales during the first half of 2009 fell significantly. Beginning in late 2008, several national mortgage servicers, with major investors such as Fannie Mae, temporarily slowed or halted the processing of foreclosures to allow for new loss mitigation policies to be put in place. Consequently, few foreclosures proceeded to final sale during the first several months of 2009, driving down foreclosure sales totals for the period.

Foreclosure filings are the initial filing that begins the foreclosure process, and foreclosure sales totals are the total number of foreclosures that have been sold at auction at the end of the foreclosure process.

“The number of new people entering foreclosure in April is clearly down from a year earlier, but the overall trend is pretty flat,” said Ryan McMaken, a spokesperson for the Division of Housing. “Homeowners and foreclosure counselors are still dealing with a very large number of new filings from last year, and that’s keeping foreclosure sales numbers high as well.”

Foreclosures vary by county

Foreclosure activity varied by county. The counties with the largest decreases in foreclosure filings from April 2009 to April 2010 were Pueblo County and Denver County, where filings decreased by 34.4 percent and 30.6 percent, respectively. The largest increase was in Mesa County where filings increased 100 percent year-over-year.

Over the same period, foreclosure sales increased in all counties except Denver County and Pueblo County where foreclosure sales fell by 16.4 percent and 0.4 percent, respectively. The largest increase was found in Mesa County where foreclosure sales increased 675 percent from April 2009 to April 2010.

The county with the highest rate of foreclosure sales was Weld County with a rate of 473 households per foreclosure sale. Adams County came in second with 585 households per foreclosure sale. The lowest rate was found in Boulder County where there were 2,142 households per foreclosure sale. The largest increase in foreclosure rates since 2009 was found in Mesa County where the foreclosure rate increased more than seven fold year-over-year.

The Division of Housing’s monthly foreclosure report surveys foreclosure activity in the twelve largest counties of Colorado. The report is a supplement to the Division’s quarterly foreclosure report that includes all counties in Colorado.

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

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Foreclosure sales at auction, the event that completes the foreclosure process, increased 13.3 percent from the first quarter of 2008 to the same period this year, rising from 5,899 to 6,686. From the fourth quarter of last year to the first quarter of this year, sales rose 22.3 percent from 2009’s fourth-quarter total of 5,466. (For another recent foreclosure story, please visit April foreclosures rise at a fast clip.)

Due to a national moratorium on processing foreclosures put in place in late 2008 and early 2009, foreclosure sales during the first quarter of 2009 fell significantly to a total of 4,354. Beginning in late 2008, several national mortgage servicers, with major investors like Fannie Mae, temporarily slowed or halted the processing of foreclosures to allow for new loss mitigation policies to be put in place. Consequently, few foreclosures proceeded to final sale during the first quarter of 2009, driving down foreclosure sales totals for the period. Comparing the first quarter of 2009 to the first quarter of 2010, foreclosure sales were 53.6 percent higher in 2010.

Stability seen

“Looking quarter to quarter, there’s quite a bit of stability in foreclosure activity right now,” said Ryan McMaken, a spokesperson for the Division of Housing. “Since 2008, quarterly totals have not changed very much if we account for events like the moratorium. But, while foreclosure activity isn’t increasing much, it’s not going away either.”

Nevertheless, 2010’s first-quarter total for foreclosure sales at auction was the highest since the third quarter of 2007. Driving the large number of foreclosure sales were the record-high totals of new foreclosure filings experienced during the second and third quarters of last year.

“With more than 12,000 new foreclosure filings each quarter during mid-2009, there are a lot of foreclosures now reaching final sale in the foreclosure process,”McMaken said.” Fortunately, the number of new filings has started to go down again. We are stable, but we are stable at a very high rate. It seems that we hit that high peak in 2007, moved down a little. But there are no signs of them dropping off substantially, until we see some real job growth and start seeing some real increases in income.”

According to the division’s report, an “examination of month-by-month data has shown that, generally speaking, there is a six to eight-month delay between a change in new foreclosure filings totals, and a subsequent change in foreclosure sales totals.”

County activity varies

Foreclosure activity has varied from county to county. Since the first quarter of 2009, foreclosure filings have fallen in Adams, Denver, El Paso and Larimer counties. Among metropolitan counties, the largest decreases were found in Larimer and Pueblo counties where filings fell year-over-year by 15.1 percent and 9.7 percent, respectively.Mesa County reported the largest increase among metropolitan counties during the first quarter with new filings increasing 126.9 percent, year over year.

Although new foreclosure activity in Weld County has been increasingly stable in recent quarters, Weld reported the highest foreclosure rate among all metropolitan counties with 178 households per foreclosure sale at auction during the first quarter. There were 192 households per foreclosure sale in Adams County, and 234 households per foreclosure sale in Arapahoe County.

Boulder County reported the lowest foreclosure rate among metropolitan counties with 605 households per foreclosure sale during the first quarter of this year. In Denver County, there were 329 households per foreclosure sale.

Hotline helping

Although the number of foreclosure sales has increased, thousands of Colorado residents continue to avoid foreclosure through loss mitigation efforts like the Colorado Foreclosure Hotline.

“We’ve seen only growth in demand for housing counseling and the hotline counselors have been seeing more and more clients as time goes on,” said Stephanie Riggi, manager of the Foreclosure Hotline Call Center. “During the first quarter of 2010 alone, 2,473 homeowners worked with housing counselors and avoided foreclosure either through short sales, loan modifications or other strategies.

Riggis said calls to hotlines are matching the number of filings. A new state law requires anyone facing foreclosure to receive the contact information for the hotline.  While that encourages people to call the hotline, she said she would like consuemrs to call before they are delinquent on their mortgage, as a counselor likely to provide them with more options and guide them through the process. “There are so many programs, and so many options out there now, that a lot of consumers are simply over-whelmed,” she said.

Shannon Peer, of the non-profit Brothers Redevelopment in Edgewater, said that people are now more willing to get help now than they were two years ago. The stigma has decreased, as the foreclosure crisis has spread. “Probably every one knows someone or has a family member who has gone through this,” Peer said.

New short-sale program falls short

Billie Jo Downing, an expert on short sales, in which the lender accepts less than the mortgage amount, remains the best solution for many distressed homeowners. But she said the Treasury Department’s attempt to streamline short sales with new rules that went into effect on April 5 under the the Home Affordable Foreclosure Alternatives (HAFA) program, has had little impact so far. The program provides incentives to loan servicers that provide short sales and deeds-in-lieu of foreclosure for borrowers who failed a modification through the Home Affordable Modification Program, or HAMP.

“We’re seeing very little from the new HAFA program,” Downing said. “Very few are participating in it since it was rolled out on April 5. A few “private label” lenders are participating, and they may account for 10 percent to 15 percent of the loans out there. But the short-sale still remains a viable option for many who have been unable to get loan modifications. For many, it’s the next step in the triage process.”

The full report is available on the Division of Housing blog.

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

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