David Stevens, president and CEO of the Mortgage Bankers Association and the former FHA Commissioner, was the keynote speaker at a Boulder conference.

BOULDER – Watch a video of David Stevens at the end of this blog

When David H. Stevens graduated from the University of Colorado in Boulder and took his first job as a loan officer in downtown Denver in 1980, the prime rate was at an all-time high of 21 percent, veterans were leaving the lending and real estate industries in droves, and many wrote off the American Dream of owning a home as nothing but a nightmare.

Yet, Stevens couldn’t have been more excited.

“Why? Because I knew that real estate is cyclical and it would come back,” Stevens said today, as the keynote speaker at the Boulder County Business Report’s annual Boulder Valley Real Estate Conference & Forecast.

Today, Stevens, the president and chief executive officer of the Mortgage Bankers Association, is more excited about the residential real estate market than he was 30 years ago, when he started in the business. He took the MBA job after resigning as the Federal Housing Administration commissioner last April.

“This is the greatest opportunity in U.S. history to buy a home,” Stevens said. “You can lock-in a mortgage rate at lower than what our parents paid for a home. Remember when everyone was excited about 6 percent rates? Now they are at 4 percent. But believe me, those rates can be gone tomorrow. People are going to look back and wish they had taken advantage of these conditions.”

Rates beat price

Rates are so low, he said, that  if you bought a $250,000 home with a 4 percent loan, and it fell by 10 percent in value, 10 years later you would still be better off than buying the same home with a 6 percent loan that did not drop in value. And because the value of buying a home includes financing as well as the sales price, it often is a superior investment to renting, he said. Because apartment rental rates are rising faster than the supply is increasing, the demand for them is creating the equivalent of an “option-ARM,”he said.

An option ARM was a  type of subprime mortgage that helped create the worst housing crisis since the Great Depression. “We were great at creating the ultimate neutron-bomb products,” Stevens said. “It killed the families but left the buildings standing,” although many ended up as foreclosures. While at the FHA, he shut down or penalized more than 2,000 firms, more than anyone else in FHA’s history, he noted. He said the industry still must weed-out all of the bad apples, such as real estate brokers who create LLC’s to do sham short-sale transactions where they quickly flip properties and defraud banks.

“I deal in facts, real facts, based on data and research,” Stevens said.

News fuels low consumer confidence

One of the big problems that has kept consumer confidence low, is that the media is constantly preaching the end of homeownership, he said, using a Power Point display to show doom-and-gloom headlines from the New York Times, Washington Post, Wall Street Journal and USA Today.

Dave Stevens plans to debate Suze Orman on strategically walking away from a mortgage.

But probably no one grates his nerves more than financial guru Suze Orman. Orman, who has a show on CBNC, has preached walking away from your mortgage, if your home is deeply underwater, even if you can afford to pay your mortgage.

“I’m going to appear on Suze Orman’s show in about two weeks,” Stevens said. “I’m not going to pull any punches. That is totally irresponsible.” He said that the Occupy Wall Street members who say that student loans shouldn’t be paid back is equally as irresponsible, although he joked that with a son attending CU and another child about to enter college, a free higher-education wouldn’t be so bad for his pocketbook.

One reason that he is optimistic about real estate, long-term, is because  research shows that the so-called Echo generation – bigger than the Baby Boom generation – is every bit as interested in ultimately buying a home as the Baby Boom generation, he said. However, the Echo Boom is going to have far more Hispanic, Asian and African-American buyers than the Baby Boomers did, he said.

Indeed, foreigners already are seeing value in depressed home prices in the U.S.

When he was visiting China last February, when he was still with the FHA, his group stopped off in Hong Kong, where he read an English newspaper.

“They had ads showing prices of homes in Buffalo, New York,” he said. “Asians are buying homes in places like Buffalo, Detroit and Florida. What do they know that we don’t know? They see the long-term value in homes at these beat-up prices.”

Challenges abound

Still, the real estate and lending industries are facing unprecedented  challenges, which will make for tough-sledding in the short-term,  he said.

“If you are visiting Washington, D.C., drop the phrase, “silly season,” and everyone will know what you are talking about,” Stevens said. “By silly season, we mean it is election time, when Republicans will do what ever it takes to keep Obama from being re-elected, and Democrats will do whatever it takes to keep a Republican from being elected President.”

That means the lending and real estate industries have big targets on their backs.

“It’s coming from both the Republicans and Democrats,” Stevens said. “They want to make sure the financial meltdown does not happen again, so they are looking at more and more regulations. The Dodd-Frank act has about 300 regulations, the vast majority of them you have never heard about.” He said a half dozen or more different agencies typically are looking at the same regulations. “And each agency has its own perspective and agenda, and often the are in conflict with each other.”

Still, he said if you question why you have chosen real estate as a career, if you can hang on for the next couple of years, you will be rewarded, he predicted.

“Long-term, the future of real estate is bright,” Stevens said.

Video: David Stevens in his own words

Related Posts:

• Risk retention threatens lenders, consumers
• FHA Chief Pulls No Punches on Housing While in Denver
• Home sales sizzle in March
• $100 downpayments for HUD homes
• Lenders face regulatory speed traps

Colorado remains on the Top 10 list it has never wanted to be on.

Colorado ranked tenth in May for its foreclosure rate, according to a report released today by RealtyTrac. RealtyTrac, based in Irvine, Calif., found that total foreclosure activity in May fell by 13.6 percent in May from May 2010, less than half of the 33.4 percent year-over-year drop for the entire nation. However, on a consecutive month basis, Colorado showed a greater percentage drop, with the foreclosure rate falling by 4.4 percent, compared with just under a 2 percent drop average drop across the country from April.

RealtyTrac tracked a total of 4,187 Colorado properties in some stage of foreclosure – from the initial notice to the real estate sale at the public trustee public auction – in May. In Colorado, one out of every 518 households were in some stage of foreclosure, compared with one out of every 605 households for the nation.

Ryan McMaken, of the Colorado Division of Housing, who analyzes the state’s foreclosure rate by using a different methodology, noted that Colorado continues to hover around the national rate and its ranking is at No. 10 is about where it has been for a long time.

“It looks like there’s very little change here, actually,” McMaken said. “The conflct between the Mortgage Banker Association’s data and the Realtytrac data continues since the MBA data continues to show Colorado falling behind other states, but the state is holding steady in the Realtytrac rankings. The drop in foreclosures in this report further reinforces almost everything else we’re seeing in Colorado trends right now. However, it’s curious that the year-over-year change in the Realtytrac report is much smaller than our own reported year-year-over changes of 20 and 24 percent for sales and filings, respectively. The month-over-month decline was expected, of course, since May tends to be a lighter month for foreclosure activity.”

National snapshot

Nationally, RealtyTrac found 214,927 properties in some stage of the foreclosure process, including default notices, scheduled auctions and bank repossessions in May.

“Foreclosure processing delays continue to mask the true face of the foreclosure situation, although there were some clues in the May numbers of what lies behind that mask,” said James J. Saccacio, chief executive officer of RealtyTrac. “First, activity spiked in May for various stages of the foreclosure process in some states, a pattern that has occurred in several states over the past few months. This pattern provides evidence that lenders are somewhat unevenly pushing batches of bad loans through foreclosure as they overhaul their paperwork and documentation procedures and as they determine that some local markets are able to absorb more foreclosure inventory.

“Second, while the inventory of properties in the foreclosure process has declined steadily over the past six months — thanks in large part to 16 consecutive months of year-over-year declines in new default notices — the inventory of unsold bank-owned REOs increased in April and May even as new REO activity slowed in both of those months,” Saccacio continued. “That points to continued weak demand from buyers, making it tough for lenders to unload their REO inventory. Even at a significantly lower level than a year ago, the new supply of REOs exceeds the amount being sold each month.”

Contact John Rebchook at JRCHOOK@gmail.com

Related Posts:

• Colorado ranks No. 12 for foreclosures in May
• Colorado foreclosures fall 18%
• State No. 10 in foreclosures
• Foreclosures mixed bag in 3Q
• Foreclosure filings fall, sales skyrocket

Colorado’s foreclosure crisis has hit bottom, and most  states are in worse shape than in Colorado as far as homeowners losing their homes, according to an in-depth analysis of the latest Mortgage Bankers Association data by Ryan McMaken of the Colorado Division of Housing.McMaken’s analysis of the MBA data shows that Colorado has the 14th lowest foreclosure inventory in the nation. Colorado was one of the first states to be hit by the foreclosure crisis, and before 2008, often had one of the highest foreclosure rates in the nation. Colorado is now in 36th place, according to McMaken’s  analysis.

“Clearly, we have hit bottom,” McMaken said on Friday. “But the number of filings are still going up and there is still so much fragility in the market that we don’t want to be over-confident. Anything can happen. But the trends we are seeing so far have been good.”

Colorado foreclosure rate lower

The percentage of Colorado mortgage loans in foreclosure fell to 2.53 percent int the fourth quarter, according to the latest MBA information, compared to the national average of 3.63 percent. Even on a national basis, the foreclosure rate is down from its all-time high of 5.02 percent in the first quarter of 2010. The 28 percent  drop from the national high is so significant that “we have clearly turned the corner,”  said Jay Brinkman, MBA’s chief economist. Although delinquencies and foreclosure rates remain above the historical norms, he said “the delinquency picture should continue to improve,” this year.

And Colorado “continues to improve faster than the nation with its delinquency rate,” said McMaken. He also analyzed third-quarter delinquent mortgage data from the MBA and “the same trend  held up . Colorado held up better than the nation.”

RealtyTrac  data questioned

One of the reasons that McMaken looked at the data because he questioned whether Colorado truly has the 10th worst foreclosure rate in the country, as RealtyTrac data consistently shows. RealtyTrac, based in Irvine, Calif., uses a different methodology than the MBA. RealtyTrac combines every aspect of the foreclosure process from the first filing to the REO (real estate owned) property, following the public trustee auction. The MBA tracks loans that are 30, 60 and 90-days delinquent. After a homeowner hasn’t made a payment in 90 days, banks can begin the foreclosure process.

“One of the reasons I wanted to analysis this information is because I wanted to do a reality check on RealtyTrac,” McMaken said. “I don’t see (how ranking Colorado in the top 10 states) can be true. Clearly, 35 or so other states are in worse shape than in Colorado. Even as the nation as a whole is off its peak, we are no place near our peak set in 2007.”

Foreclosure inventory rising due to processing delays

However, the total foreclosure inventory in Colorado is rising, but that is largely because of a delay in homes being processsed of in the wake of “robo-signings” and other bookkeeping snafus by big banks, McMaken said.”We think the inventory is rising because we still have new foreclosures being added, but banks are just leaving them there. They are just sitting. We think the increased inventory signals that they have stopped moving their inventory until they can resolve all the robo-signing type of issues.” Still, the total inventory of foreclosed homes is down almost 10 percent from its peak reached at the end of 2009, he said, while nationally the overall foreclosure inventory hit a new high that is 1.1 percent higher than the previous record set in the first quarter of 2010.

Colorado better than U.S. by almost any metric

Yet, it is clear the the number of new distressed loans in Colorado “are accelerating downward faster than across the nation. Nationally, loans that are either in foreclosure or 90 days delinquent are down 11.4 percent from their peak, while in Colorado they are down 15.7 percent from their peak, McMaken’s analysis shows.

That means that fewer Colorado homes will enter the foreclosure process than in recent years. “What I am hoping is that for the foreseeable future that means we will see the number of new filings going down. Then, it would seem inevitable that the foreclosure inventories would go down. I am always worried that the number of filings could go back up. But we should have some warning, if we start seeing a jump in 30-day and 60-day delinquencies.”

Related Posts:

• Colorado No. 10 in foreclosures
• Colorado ranks No. 12 for foreclosures in May
• Foreclosure filings fall, sales skyrocket
• Foreclosures down in Colorado
• Foreclosure auctions down 25%

The Mortgage Bankers Association said that refinancing activity fell by 3.1 percent on the week ending on Sept. 3, while home-purchase loan activity was down 38.8 percent from a year ago.

“Purchase applications increased last week, reaching the highest level since the end of May,” said, Michael Fratantoni, MBA’s Vice President of Research and Economics. “However, purchase activity remains well below levels seen prior to the expiration of the homebuyer tax credit, and is almost 40 percent below the level recorded one year ago.”

And while refinance volume dropped last week for the first time in six week, “the level of applications to refinance remains close to recent highs, as historically low mortgage rates continue to draw borrowers into the market.”

Refinancing continue to drop

Peter Lansing, president of Universal Lending, a sponsor of this site and the chairman of the Colorado Mortgage Lenders Association, said he expects that refinancing activity will continue to drop, despite rates at or near historical lows.

A 30-year-fixed mortgage is averaging about 4.3 percent now, compared to about 5 percent a year ago. There is about a 10 percent chance rates will go even lower, and a 90 percent chance they will rise, Lansing estimated.

But even if rates drop slightly, Lansing doesn’t think that will fuel a frenzy of refinances. “I think what has happened is that we are working through the bubble of people who can refinance,” Lansing said.

Lansing said that many people who have jobs, good credit, equity in their homes, and interest rates high enough to warrant refinancing, either have refinanced or are in the process of getting a lower rate.

“We are going to come out on the other side of that bubble,” Lansing said. “I think that refinancing applications are going to continue to go down, and no matter whether rates drop further, in 60 days or so, it is going to more or less be over. There will be nobody left to refinance.”

Culprit: No consumer confidence

Lansing, and many others, said that a lack of consumer confidence is driving force that led to almost a 40 percent drop in buying activity from a year ago.

“You can blame it on jobs, but, overall, about 91 percent of the people still have jobs and about 9 percent are unemployed, when you look at the national averages,” Lansing said.

“But what I think it really all comes down to is consumer confidence,” Lansing said. “Consumers are worried about things like a double-dip recession. People don’t have the confidence to buy big-ticket items like homes. I’m sure that is reflected in other large-ticket items like automobiles.”

Stimulus gone

Also, the tax-credits of up to $8,000 required homes to be placed under contact by April 30 and closed by the end of this month.

“There is no stimulus,” Lansing said. “The demand is gone that was created by the stimulus. All that a stimulus does is tell you now is a good time to purchase something; it gives you a higher-than-normal opportunity to purchase it. The stimulus package is gone, and now, more and more people are saying that the government should stop with its stimulus packages. More people are saying do not stimulate anything,” and let the economy run its normal course, without taxpayer dollars.

Contact John Rebchook at JRCHOOK@gmail.com

Related Posts:

• Risk retention threatens lenders, consumers
• Trip down memory lane for mortgage registry
• Universal Lending celebrates 30th anniversary
• Many shut out of refi bonanza
• Permanent loan modifications up 45% in Colorado

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.

Related Posts:

• Colorado No. 10 in foreclosures
• Foreclosure filings fall, sales skyrocket
• RealtyTrac: Colorado 9th for foreclosures
• Colorado foreclosures fall 18%
• Foreclosure rankings for cities

Mortgage bankers and brokers in Colorado are among the most vocal opponents of the “risk-retention” requirement proposed in the Restoring American Financial Stability Act.

The idea is to require lenders to have some “skin in the game,” in an attempt to curtail lenders from making inappropriate, risky loans, a leading cause of the foreclosure crisis that swept the country starting in 2007.

Proposal goes too far

But the proposal goes too far by requiring lenders to retain up to 10 percent of the loan value for every mortgage they make that is sold into the secondary market, for as long as the loan in outstanding, according to a broad-range of critics. That would mean mortgage bankers and brokers – among other lenders – would need to have billions of dollars on hand, something they are not set up to do, opponents contend. (See chart below for an example of the impact to mortgage lenders.)

“To require a 5 percent or 10 percent risk retention, really penalizes  independent mortgage bankers,” said Mike Rosser, who started in the Denver mortgage business since 1965.

“Most of the FHA loans that are being done, and have been done, are by the independent mortgage bankers,” added Rosser, now principal of an Aurora-based consulting firm, the Mortgage Investment Co. Inc. “This will be very bad for homeowners who want to get an FHA loan because they will have far fewer choices of where to go.”

HUD already polices lenders

Rosser said many in Congress do not realize that the U.S. Department of Housing and Urban Development, which owns FHA, “already has a very strong auditing program, a mortgagee review board, they do quality audits all of the time, and have a certain amount of capital requirements to get into the FHA business. So this is really redundant.”

Some lenders point out that the so-called toxic-loans of the past – such as options ARMs and other subprime loans- no longer are being made, while the plain vanilla 30-year mortgages have been packaged and sold as securities for decades, without causing the problems of the discontinued loans that were made without strict underwriting guidelines.

Skin in the game

Peter Lansing, head of Universal Lending, one of the largest privately held mortgage banking companies in Denver (and a sponsor of InsideRealEstateNews), said that Congress “wants us to have some financial skin in the game,” which is why it is considering the risk retention requirements.

But despite the recent financial calamity involving so-called toxic loans, the lending industry has done very well when it properly underwrites conservative loans based on a borrower’s assets, appraisal, income, credit scores and work history, and debt to income ratios. In fact, a report completed this week, shows that borrowers of risky loans are more than three times likely to default than traditional loans.  (For a separate story on that report, please go to this link.)

Congress may be unaware of consequences

Lansing said he does not see this as a Democratic or Republican issues.

“I honestly think that Congress has not thought this through,” Lansing said. “What Congress is proposing is ‘over-medicating.’  Congress does need to guard against future abuses which happened in the past. I don’t want to carry this too far, but just like building codes are stricter in the U.S., so if we have an earthquake, it doesn’t have the same devastation as we have seen in some other countries, with less stringent building standards. But we don’t need is over-medication, which will actually be devastating to consumers and mortgage lenders.”

Public in the dark

Lansing said that while people in his industry are aware of it, he believes most of the public doesn’t have a clue it is being proposed or its impact.

“This would be very bad for the consumer,” Lansing said. “No mortgage lender has the type of capital needed to put in an escrow account or something like that. The only way to raise the money is to charge the consumer. On a $200,000 loan, if they only required another 5 percent, that would be an extra $10,000.  That’s obviously not going to work.”

Peter Mills, which last September helped found the Community Mortgage Banking Project, a Washington, D.C.-based coalition created to represent the interests of independent mortgage companies, agreed with Lansing.

“The problem is it does not distinguish between high-risk loans and well-underwritten loans,” Mills said. “It is a very blunt instrument, which would affect everyone across the board.”

Mills said the Senate version would require a 10 percent risk retention amount and the House version a 5 percent retention.  But he said even a 1 percent retention would be too much.  For a lender making about $1 billion a year in loans, in three years it would need to put aside more than $50 million in funds at even a 1% risk retention rate, by his group’s calculations.

Lenders protest proposal

The Community Mortgage Banking Project and the Community Mortgage Lenders of America, last November sent a letter signed by 87 mortgage lenders across the country to the Senate Banking Committee. Eight of them were from Colorado. Only Michigan had as many lenders sign the letter.

“We are very active on this issue in Colorado,” Lansing said. In addition to Universal Lending, the letter was signed by executives from America’s Mortgage in Wheat Ridge; Cherry Creek Mortgage in Greenwood Village;  Clarion Mortgage Capital in Greenwood Village; First National Bank Mortgage in Fort Collins; Ideal Homes Loan, Englewood; Pinnacle Mortgage Group, Lakewood; and Unifirst Mortgage, Grand Junction.

“Under the risk retention requirement in the draft bill, independent mortgage bankers- which accounted for almost one-third of all home mortgages in 2008 – would be forced out of business,” according to the letter to Christopher J. Dodd and Richard C. Shelby, the chairman and ranking member of the Senate Banking Committee, respectively.

Community banks, credit unions impacted

But it wouldn’t stop there.

Community banks and credit unions also would “face liquidity and balance sheet constraints that would limit their lending capabilities,” according to the letter.

The impact of a “poorly designed” risk retention requirement would consolidate the market into the hands of a few major lenders, according to the mortgage bankers.

“This is an ironic result in a bill that is trying to mitigate systemic risk and too-big-to-fail concerns,” the mortgage lenders contend.

Bank Monopolies Feared

Mortgage bankers are facing off on the issue with traditional banks, which have money on hand from short-term investments such as checking and saving accounts and CDs. In a statement, the American Bankers Association said that lenders with secured deposits already have enough capital on hand and should be excluded from the risk retention requirement, although it oppose some other parts of the proposed legislation.

“The big banks could certainly live with this,” said consultant Rosser.

But Lansing, of Universal Lending, isn’t so sure.

“Yes, large financial institutions could be better able to handle these requirements,” Lansing said. “But last year, something like $2.75 trillion in mortgage loans were made in the U.S. Is any bank in the country big enough to absorb those kind of costs and handle that kind of volume?”

Also, Lansing said that consumers would lose if only a few banks were making home loans.

“What Congress, unintentionally would be doing is creating a situation where maybe only three or four lenders in the country would make all of the home loans,” Lansing said. “What Congress would be doing is creating monopolies. I’m not against regulation. I think our industry needs, good, sound regulations that make sense. For example, I think some kind of risk retention probably is appropriate when making high-risk loans. But I am against monopolies.”

The Mortgage Bankers Association, which represents about 280,000 people nationwide, strongly opposes the measure, saying it would have “dire consequences” for mortgage markets.

The provision would “unnecessarily stem competition, reducing choices and increasing the costs of credit for consumers,” according to the group. “At the same time, smaller community banks and even larger depositories would be constrained from lending – and available funds for home financing would be reduced by countless billions of dollars – to meet reserve requirements,” according to the MBA.

Grassroots group shares concerns

And the American Homeowners Grassroots Alliance, which in the past has butted heads with lenders on many issues, worries that while the risk-retention requirement will require more more responsible lending, “it may also somewhat limit the availability of mortgage loans for qualified borrowers and thereby slow the housing market’s economic recovery.”

It urged the banking committee to avoid this unintended consequence.

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

Related Posts:

• FHA loans soar in Denver, Colorado
• RESPA expert tells Denver real estate audience to prepare for big changes
• Refi’s, purchase home loans down
• Trip down memory lane for mortgage registry
• Universal Lending celebrates 30th anniversary

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 public trustee auction at the end of the foreclosure process. In many cases, the bank holding the loan wins the bid and the home becomes known as a REO, or Real Estate Owned property.

Ryan McMaken, spokesman for the housing division, and the author of the report, is not alarmed by the spike in foreclosure sales, which had been declining at the end of 2009, compared to a year earlier.

“What happened is that we had all of those moratoria in the fall of 2008 through January of 2009, which led to lower foreclosure activity,” McMaken said. “I think the big fear was that we would see a big jump in foreclosure activity after they ended, although for the most part that did not happen. We did see a fairly significant jump between June and July of last year, but it was fairly short-lived

“Recent movements in foreclosure sales and filings reflect recent overall trends, as monthly sales totals have moved upward and monthly filings totals have moved downward,” according to the report.The report goes on to say that the “movements in foreclosure sales reflect movement in foreclosure filings, but lag by six to eight months. (If the)  current relationship between filings and sales continues, foreclosure sales will begin to fall again during spring 2010.”

Foreclosures vary hugely by county

Foreclosure activity varied by county. The counties with the largest decreases from January 2009 to January 2010 in filings activity were Douglas County and Denver County, where filings decreased by 26 percent and 17 percent, respectively. The largest increase was in Mesa County where filings increased 159 percent year-over-year.

Foreclosure sales activity increased in all metropolitan counties during January of this year compared to January of 2009. The smallest increase was in Denver County where sales increased 19 percent. The largest increase was found in Mesa County where foreclosure filings increased 337 percent from January 2009 to January 2010. However, measuring changes in foreclosure sales activity since 2008, all counties reported falling foreclosure sales except Boulder and Mesa Counties.

The county with the highest rate of foreclosure sales was Weld County with a rate of 532 households per foreclosure sale. Adams County was a close second with 535 households per foreclosure sale. The lowest rate was found in Boulder County where there were 1,779 households per foreclosure sale. The largest increase in foreclosure rates since 2009 was found in Mesa County where the foreclosure rate more than tripled year-over-year.

Not out of the wood yet

McMaken, however, said there may be more foreclosures in the pipeline. The Mortgage Bankers Association reports that the number of mortgages in Colorado that were “seriously delinquent” at the end of 2009 rose to 5.87 percent from 3.96 percent during the same period in 2008, more than a 48 percent increase. Seriously delinquent loans are at least 90 days overdue and typically in the early stages of a foreclosure. In 2005, only 1.97 percent of the loans were seriously delinquent, and the percentages have risen every year since them.

“Basically, they went from 4 percent at the end of 2008 to 6 percent at the end of 2009, if you round off the numbers,” McMaken said. “That is a pretty significant one-year increase.” He said he expects that foreclosure sales by public trustees “will slowly ebb downward through the spring. But as far as filings, who knows?”

The housing division’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.

The full report is available on the Division of Housing this link.

[table id=76 /

Source: Colorado Division of Housing

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

Related Posts:

• Colorado ranks No. 12 for foreclosures in May
• Job losses driving foreclosures
• Denver No. 46 in foreclosures
• Denver-area foreclosure filings rise, sales drop, in October
• Foreclosure activity peaked in July

The good news is that foreclosure filings in Colorado barely rose from 2008 – only a 0.23 percent increase, according to a national report.

The bad news is that Colorado still is ranked No. 10, according to RealtyTrac, based in Irvine, Calif.

The report showed 50,514 total properties in Colorado with some kind of foreclosure action, which equates to 2.37 percent of all housing units in foreclosure. The U.S. average is 2.21 percent.  The report also shows one out of every 42 households in foreclosure, compared with one of every 45 for the U.S. average. Foreclosure activity in Colorado, according to RealtyTrac, rose 28.2 percent from 2007, far below the 120 percent average national increase.

“It’s kind of bizarre that Colorado is still in the top 10,” said Ryan McMaken, noting that the overall rate in Colorado is very close to the national rate. Also, Colorado’s foreclosure activity has been basically flat, while it is still rising in many other parts of the country.

“RealtyTrac combines all of the different kind of foreclosure actions,”McMaken noted, while he separates new filings and homes that actually go to foreclosure sales.

“If you dig deeper, you will find that while our filings are still climbing, the number of sales are going down,” as banks work with borrower to modify loans, he noted. “We do show a net increase in activity, and we probably will continue to do so, as long as the number of filings continue to rise.”

Still, rather than the 10th worst state in the nation as far as foreclosures, he said Colorado is really more in the middle of the pack, he said. That is also affirmed my Mortgage Banker Association numbers, which shows Colorado in the middle of the U.S., as far as delinquent loans.

An earlier report by InsideRealEstateNews.com found that while foreclosure filings in the Denver area rose by 6.4 percent in 2009 from 2008, most of the percentage increases were found in Boulder, Broomfield and Douglas counties, while activity was flat or dropped slightly in Denver and Adams county. (For that report, please visit this blog.)

Nationwide, RealtyTrac  found more than 3.9 million foreclosure actions -  default notices, scheduled foreclosure auctions and bank repossessions — were reported on 2. 8 million properties in the U.S.  in 2009, a 21 percent increase in total properties from 2008 and a 120 percent increase in total properties from 2007.

Four states accounted for more than 50 percent of the nation’s 2009 total, with more than 1.4 million properties receiving foreclosure filings in California, Florida, Arizona and Illinois. And almost half of those – 632,573 – were in California.

“That means that 46 other states split the remaining half,” noted McMaken. He said some people might think that the foreclosure pain was spread fairly evenly among the states, but that is not the case.

“What that means a lot of states are clumped together, and there will be a very small percent separating them,” McMaken said.

Foreclosure filings were reported on 349,519 U.S. properties foreclosure filings  on 349,519 U.S. properties in December, a 14 percent jump from November  and a 15 percent increase from December 2008 — when a similar monthly jump occurred. Despite the increase in December, foreclosure activity in the fourth quarter decreased 7 percent from the third quarter, although it was still up 18 percent from the fourth quarter of 2008.

“As bad as the 2009 numbers are, they probably would have been worse if not for legislative and industry-related delays in processing delinquent loans,” said James J. Saccacio, chief executive officer of RealtyTrac.

“After peaking in July with over 361,000 homes receiving a foreclosure notice, we saw four straight monthly decreases driven primarily by short-term factors: trial loan modifications, state legislation extending the foreclosure process and an overwhelming volume of inventory clogging the foreclosure pipeline. Despite all the delays, foreclosure activity still hit a record high for our report in 2009, capped off by a substantial increase in December. In the long term a massive supply of delinquent loans continues to loom over the housing market, and many of those delinquencies will end up in the foreclosure process in 2010 and beyond as lenders gradually work their way through the backlog.”

Nevada led the nation last year, with more than 10 percent of the homes receiving some type of a foreclosure action in 2009, giving it the dubious distinction of being No. 1 for foreclosures for the third consecutive year.

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

Related Posts:

• Colorado No. 12 in foreclosures
• Colorado No. 11 for foreclosures in October
• Foreclosure filings fall, sales skyrocket
• Denver No. 46 in foreclosures
• Foreclosures growing in Denver-area suburbs