Only 169 homeowners in Colorado moved into the permanent modification portion of the Home Affordable Modification Program, according to a report released today by the government. Last year, an average of 242 homeowners entered the program each month in Colorado. December was the first time fewer than 200 people had entered the permanent modification program.

On the other hand, the number of people entering the program rose by 10 to 1,005 from 995 in November. While a small number, typically the number of people entering the program drops each month. The Treasury Department has instructed loan servicers to pre-quality people, as initially a large number of distressed homeowners were accepted into HAMP, but were not accepted into the permanent modification portion of the program. Now, the vast majority of the people who begin the program remain in it.

Shannon Peer, housing counselor manager at the non-profit Brothers Redevelopment, wasn’t overly concerned about the drop in the permanent modification. First, it since it is only one month it could be an anomaly, he noted. In addition, he pointed out that sometimes the Treasury Department later revises the numbers, so it is possible that December numbers will end up being more in line with the average.

“Certainly, this will be a number we will keep our eye on,” Peer said. And while the number of people entering the program rose slightly, it is moving in the right direction.

“This is the first time in many months that we have seen any upward movement,” Peer said. “And at some point in Colorado, as people are getting back on their feet financially, we might start seeing more people qualify for the program.”

Initially, the Obama Administration hoped to help three million to four million people with HAMP. So far, about 930,000 people across the country are in the permanent modification plan, far short of the original projections. Just days ago, President Obama said that he would be the “first to admit” the previous programs by his administration “didn’t help as many folks as we’d hoped.”

Still, HAMP has saved people in the permanent modification part of the program about $10.5 billion in reduced mortgage payments. “A lot of people say it cost too much money, and it has been a boondoggle, but they only spent a fraction that was allocated to it,” Peer said. “I think that all of these programs chip away at the problem in different ways. It is good to have a suite of choices to address the problem.”

A few days ago, Obama urged the public to pressure Congress to adopt legislation that would make it easier for borrowers to refinance into historically low mortgage rates. That legislation is anticipated to cost $5 billion to $10 billion in new fees on banks, would help an estimated 3.5 million people. It would require the Federal Housing Administration assume the risk on the loan.

Meanwhile, banks are reportedly close to reaching a settlement with the government for improper loan servicing, which could result in principal reductions for some borrowers. Another program, called the Home Affordable Refinance Mortgage, or HARP, makes it easier to refinance a loan that already is guaranteed by Fannie Mae or Freddie Mac.

Details crucial

Details of what has been dubbed HARP 2.0 are expected to be released shortly.

Peter Lansing, president of Universal Lending, said the devil is in the details. Universal Lending is a sponsor of InsideRealEstateNews.

“Mortgage lenders and real estate agents want to get down to what that means to us and our customers right now,” Lansing said. “We need to know what this will mean for specific borrowers and homeowners. We need to know the nitty-gritty of it. We listened to what the President said in his State of the Union address and were very attentive, but now we need to know how it is going to work.”

He also said that every program, even if the intentions are good, can have unintended consequences.

“It’s like you have a big fire and you throw a bunch of water on it. Sometimes you will put out the fire and be left with a lot of water damage.”

Month	Active Trials	Permanent Modifications
January 2010	11,708	1,797
February	11,707	2,613
March	10,929	3,422
April	8,932	4,355
May	6,423	4,960
June	4,870	5,147
July	3,329	6,124
August	2,555	6,469
September	2,216	6,660
October	2,002	6,885
November	1,853	7,134
December	1,876	7,369
January 2011	1,762	7,587
February	1,658	7,827
March	1,597	8,222
April	1,619	8,464
May	1,520	8,801
June	1,378	9,093
July	1,274	9,364
August	1,257	9,581
September	1,121	9,917
October	1,065	10,104
November	995	10,324
December	1,005	10,493

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There were 31,914 foreclosure filings in Colorado during 2011, compared to 42,746 filed during 2010, shows the report released by the Colorado Division of Housing.

Foreclosure sales at auction, the event that completes the foreclosure process, were also down during 2011, falling to the lowest level recorded since 2006.  Auction sales fell 17 percent from  23,854 in 2010 to 19,622 during 2011.

Foreclosure filing totals for the fourth quarter of this year were down 20.5 percent, falling to 8,540 this year from 2010’s fourth-quarter total of 10,737. Foreclosure sales at auction fell 13.5 percent to 4,057 from 2010’s fourth-quarter total of 4,691.

From the third quarter to the fourth quarter of this year, foreclosure filings rose 6.4 percent, while foreclosure auction sales fell 12.3 percent.

Foreclosure filings fell for the second year in a row during 2011, falling to 31 percent below 2009’s peak of 46,394. Foreclosure sales at auction fell from 2010 to 2011, following an increase in sales from 2009 to 2010. Foreclosure sales at auction peaked at 25,054 during 2007.  Auction sales totals fell 21 percent below peak levels during 2011.

Quarter-to-quarter, foreclosure auction sales have fallen for the past three quarters, reflecting substantial declines in new foreclosure filings that occurred from late 2010 to mid-2011. Foreclosure filings have risen for the past two quarters.

Legal issues slow foreclosures

“Foreclosures really slowed down during 2011, but not all of that was due to improvements in the real estate markets,” said Ryan McMaken, spokesman for the Colorado Division of Housing. “Many lenders slowed down the processing of foreclosures during the first half of 2011 to deal with legal issues. Nevertheless, we do know that mortgage delinquencies are down and that home prices are stabilizing, so that also helped to push down foreclosure totals.”

While several regions of Colorado saw improvement during 2011, some areas continued to experience growth in foreclosures.

All 12 of the state’s metropolitan counties reported drops in both foreclosure filings and auction sales during 2011. From 2010 to 2011, Adams County filings fell 27 percent and Denver County filings fell 32 percent. Foreclosure filings in Mesa County fell 28 percent during the same period. Most of the state’s 64 counties reported year-over-year declines in foreclosure filings.

Those counties that did experience increases were generally found on the Western Slope and outside the Front Range. From 2010 to 2011, only 12 of Colorado’s 64 counties reported increases in foreclosure filings. Among those 12, ten were mountain counties including Garfield, Routt, San Miguel, Gilpin and Lake counties.

None of the state’s metropolitan counties were found among the counties with the highest foreclosure rates. The five counties with the highest foreclosure rates were Gilpin, Garfield, San Miguel, Grand and Lincoln counties.  Boulder County, on the other hand, reported the lowest foreclosure rate of any metropolitan county and also had one of the lowest foreclosure rates overall.

Still too high

Although foreclosures filings have fallen for the past two years, foreclosure activity remains at unusually high levels.

“Foreclosure sales at auction have basically been flat for the past five years and totals are still twice what we’d consider to be normal,” McMaken said. “We expect more progress to be made in 2012, although the task of dealing with the existing inventory of properties in foreclosure is likely to extend beyond this year.

Foreclosure sales are opened foreclosures that have proceeded through the full foreclosure process to final sale at public auction. Filings denote the beginning of the foreclosure process, and once a foreclosure is filed, the borrower has at least 110-120 days 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 withdrawing the foreclosure.

Contact John Rebchook at JRCHOOK@gmail.com

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The report by the Irvine, Calif.-company, showed 1.78 percent of all housing units in Colorado had at least one foreclosure filing last year, compared to the national average of 1.45 percent.

The good news was that foreclosure filings in 2011 from 2010 dropped by 21.7 percent in Colorado. The bad news is that is far below the 34.3 percent drop for the overall nation.

Foreclosure filings in Colorado wee down 23.7 percent from 2009, again far below the national drop of 33.2 percent from 2009.

U.S. foreclosure rates last year were at their lowest point since 2007. RealtyTrac tracks the foreclosure process from the first filing to the REO, (Real Estate Owned), when the bank takes the property back.

Ryan McMaken, of the Colorado Division of Housing, who tracks foreclosure using a different methodology, thinks the trend RealtyTrac shows for Colorado is in the ballpark, but is skeptical that the state is doing worse than most other states.

Skeptical of ranking

“I do not know about the ranking,” McMaken said. “That remains an inscrutable process of how they arrive at their rankings.”

He noted that the Mortgage Bankers Association, and other groups, rank Colorado and the Denver area as markets with the lowest foreclosure rates, not the highest.

“We’re looking at other lists that put us among the Top 10 best,” as far as foreclosure activity, he said.

On the other hand, “ I do think RealtyTrac’s overall trend,” for Colorado is correct, he said.

“The bigger story is what we are looking at this year as far as foreclosure activity is that filings are way down, but completed foreclosure are pretty flat,” he said “We’re going to see about 20,000 foreclosure filings this years. Clearly, there is a downward trend for new filings.”

Nationally, “foreclosures were in full delay mode in 2011, resulting in a dramatic drop in foreclosure activity for the year,” said Brandon Moore, chief executive officer of RealtyTrac. “The lack of clarity regarding many of the documentation and legal issues plaguing the foreclosure industry means that we are continuing to see a highly dysfunctional foreclosure process that is inefficiently dealing with delinquent mortgages — particularly in states with a judicial foreclosure process. Colorado uses a public trustee system.

“There were strong signs in the second half of 2011 that lenders are finally beginning to push through some of the delayed foreclosures in select local markets. We expect that trend to continue this year, boosting foreclosure activity for 2012 higher than it was in 2011, though still below the peak of 2010.”

December activity hits 49-month low, scheduled auctions up in fourth quarter

Foreclosure filings were reported on 205,024 U.S. properties in December, a decrease of 9 percent from the previous month and down 20 percent from December 2010. December’s total was the lowest monthly total since November 2007 — a 49-month low.

Contact John Rebchook at JRCHOOK@gmail.com

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Colorado had consistently been in the top 10 for most of the past several years.

RealtyTrac reported that one out of every 575 households in the state were in some stage of foreclosure in November, very close to the national average of one out of every 579.

Nevada was No. 1, with one out of every 175 households in some stage of foreclosure, including default notices, scheduled auctions and bank repossessions.

Colorado foreclosures were down 24 percent from November 2010 20.2 percent down from October, both far better than the national average.

“This pretty closely mirrors our November data that we put out last week,” said Ryan McMaken, spokesman for the Colorado Division of Housing. “Both filings and sales fell more than 20 percent year-over-year in our data, and it looks like they have some similar numbers here. Of course, we also analyzed the delinquency report data showing that Colorado was actually eighth-best in the country for delinquencies and foreclosures. Also, LPS Mortgage monitor, in another survey, listed Colorado as sixth-best in the nation for delinquencies and foreclosures. So, Realtytrac’s ranking of Colorado as 11th worst appears to be unique among three separate national surveys.”

Nationally, RealtyTrac tracked foreclosure actions on 224,394 properties in November, a 3 percent drop from October and a 14 percent decrease from November 2010.

“Despite a seasonal slowdown similar to what we’ve seen in each of the past four years, November’s numbers suggest a new set of incoming foreclosure waves, many of which may roll into the market as REOs or short sales sometime early next year,” said James Saccacio, co-founder of RealtyTrac. “Overall foreclosure activity is down 14 percent from a year ago, the smallest annual decrease over the past 12 months, and some bellwether states such as California, Arizona and Massachusetts actually posted year-over-year increases in foreclosure activity in November.

“Scheduled foreclosure auctions reached a nine-month high in November, corresponding to a recent surge in default notices that began back in August,” Saccacio continued. “Many of the new defaults that started the foreclosure process over the past few months are now being scheduled for public foreclosure auctions.”

Contact John Rebchook at JRCHOOK@gmail.com.

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Foreclosure sales at auction increased in November from November 2010, the first year-over-year increase in 14 months, according to a state report released today.

However, both foreclosure filings and sales remain down by more than 20 percent so far this year, shows the report by the Colorado Division of Housing.

Foreclosure auction sales in Colorado’s metropolitan counties were up 7.9 percent in November compared to November of last year. However, comparing the first 11months of this year to the same period last year, foreclosure filings were down 28.6 percent through November while foreclosure auction sales were down 20.7 percent.

New foreclosure filings fell year over year during November with total filings dropping 21.7 percent from 2,932 filings in November 2010 to 2,296 filings in November of this year.  Foreclosure auction sales increased during the same period from 1,195 to 1,290.

From October 2011 to November 2011, foreclosure filings fell 2.3 percent, and foreclosure sales at auction rose 37.5 percent.

Foreclosure auction sales through November fell year over year from 2010’s 11-month total of 18,728 to 14,854 during the same period this year. Foreclosure filings were also down through November, falling to 23,556 filings year-to-date this year from last year’s 11-month total of 32,982.

Lender slowdown

“It looks like the big decreases in foreclosure filings that we saw during the first half of the year are behind us, but  even with some recent increases in new foreclosure activity, Colorado is still going to end 2011 with far fewer foreclosures than it saw during 2010,” said Ryan McMaken, a spokesman with the Colorado Division of Housing. “From last fall through last summer, foreclosure activity was really pushed down by a lender-initiated slowdown in foreclosure processing, but the effects of that seem to be lessening now.”

Year-to-date through November, the counties with the largest decreases in foreclosure filings, year-over-year, Mesa County and Denver County, where filings decreased by 35.2 percent and 32.2 percent, respectively. Pueblo County reported the smallest decline in filings with a decrease of 12.5 percent from the first eleven months of 2010 to the same period this year.  All counties surveyed reported year-over-year decreases in foreclosure filings.

For the first 11 months of this year, all counties also showed decreases in foreclosure auction sales when compared to the same period last year.  The counties with the largest decreases in foreclosure auction sales, year-over-year, were Broomfield County and Adams County, where auction sales decreased by 40.3 percent and 27.0 percent, respectively. Pueblo County reported the smallest decline in auction sales with a decrease of 9.1 percent from the first eleven months of 2010 to the same period this year.

The county with the highest rate of foreclosure sales during November was Adams County with a rate of 681 households per foreclosure sale. Mesa County came in second with 792 households per foreclosure sale. The lowest rate was found in Boulder County where there were 3,402 households per foreclosure sale.

The Division of Housing’s monthly foreclosure report surveys foreclosure activity in the 12 largest counties of Colorado. The report is a supplement to the division’s quarterly foreclosure report that includes all counties in Colorado.

County	First 11 months of 2010	First 11 months of 2011	Percent change from 2010
Adams	4,502	3,225	-28.4
Arapahoe	5,005	3,629	-27.5
Boulder	1,257	921	-26.7
Broomfield	277	202	-27.1
Denver	4,661	3,162	-32.2
Douglas	2,287	1,575	-31.1
El Paso	4,396	3,242	-26.3
Jefferson	3,509	2,476	-29.4
Larimer	1,675	1,221	-27.1
Mesa	1,544	1,001	-35.2
Pueblo	1,306	1,146	-12.6
Weld	2,561	1,757	-31.4
Total	32,962	13,556	-28.6

Source: Colorado Division of Housing

Contact John Rebchook at JRCHOOK@gmail.com

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The report shows that foreclosure auction sales in the state’s metropolitan counties were down 28.3 percent from October 2010 to October of this year. Sales fell from October 2010’s total of 1,308 to 938 sales during October of this year.

New foreclosure filings also fell with total filings dropping 23.2 percent from 3,059 filings in October 2010 to 2,350 filings in October of this year.

From September 2011 to October 2011, foreclosure filings fell 3.3 percent, and foreclosure sales at auction fell 16.5 percent.

Year-to-date through October, foreclosure auction sales were down 22.6 percent, falling from 2010’s ten-month total of 17,533 to 13,564 during the same period this year. Foreclosure filings were down 29.3 percent when comparing the same periods. There were 21,260 filings year-to-date this year, and 30,050 filings during the same period last year.

“October’s auction sales fell off more than expected, and it’s pretty clear at this point that there’s a well-established downward trend now in place,” said Ryan McMaken, a spokesman with the Colorado Division of Housing. “We’re cautiously optimistic that the trend will continue, but we’re waiting to see how things look after homeowners begin to pay off holiday bills early next year.”

Year-to-date through October, the counties with the largest decreases in foreclosure auction sales, year-over-year, were Adams County and Broomfield County, where sales decreased by 31.3 percent and 42.3 percent, respectively. Pueblo County reported the smallest decline in auction sales with a decrease of 10.2 percent from the first ten months of 2010 to the same period this year.  All counties surveyed reported year-over-year decreases in foreclosure auction sales.

The county with the highest rate of foreclosure sales during October was Pueblo County with a rate of 950 households per foreclosure sale. Arapahoe County came in second with 1,183 households per foreclosure sale. The lowest rate was found in Boulder County where there were 3,988 households per foreclosure sale.

The Division of Housing’s monthly foreclosure report surveys foreclosure activity in the 12 largest counties of Colorado. The report is a supplement to the Division’s quarterly foreclosure report that includes all counties in Colorado.

County	October 2010 foreclosure sales	October 2011 foreclosure sales	Year-over-year percentage change
Adams	176	69	-60.8
Arapahoe	219	162	-16.9
Boulder	36	29	-19.4
Broomfield	6	8	33.3
Denver	197	115	-41.6
Douglas	90	65	-27.8
El Paso	160	135	-15.6
Jefferson	144	107	-25.7
Larimer	54	68	25.9
Mesa	53	39	-26.4
Pueblo	47	63	34.0
Weld	126	58	-54.0
TOTAL	1,308	938	-28.3

Source: Colorado Division of Housing

Contact John Rebchook at JRCHOOK@gmail.com

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The report showed that one out of every 458 households was in in some state of foreclosure last month. By contrast, the foreclosure rate for the nation was one out of every 563 households.

In Colorado, foreclosure activity in October fell by 17.8 percent from October 2010 and by 2.6 from September. That trails the 30.6 percent drop on a year-over-year basis and a 7.4 percent month-to-month drop for the entire country.

“This report appears to be quite similar to reports from recent months,” said Ryan McMaken, spokesman for the Colorado Division of Housing, who plans to release his October report for metropolitan counties in Colorado in a week or so. Although McMaken uses a different methodology than RealtyTrac, he said its “overall monthly totals appear to be pretty similar to our own monthly counts for auction sales and for new filings,” McMaken said.

Nationally, the “October foreclosure numbers continue to show strong signs that foreclosure activity is coming out of the rain delay we’ve been in for the past year as lenders corrected foreclosure paperwork and processing problems,” said James Saccacio, chief executive officer of RealtyTrac. “However, recent state court rulings and new state laws keep changing the rules of the foreclosure game on the fly, creating more uncertainty in the housing market and threatening to prolong the road to a robust real estate recovery.”

Contact John Rebchook at JRCHOOK@gmail.com

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