Thursday, November 19, 2009

Foreclosure filings reach record high in third quarter

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New foreclosure filings in Colorado again topped 12,000, marking the fourth quarter in a row in which foreclosure filings have increased. The number of completed foreclosures grew for the third quarter in a row, reaching a total of 5,618. According to a report released Thursday by the Colorado Department of Local Affairs’ Division of Housing, new foreclosure filings reached 12,468 during the third quarter for a 9-month total of 35,112. Completed foreclosures reached a 9-month total of 14,971.

During the full year of 2008, there were 39,333 total foreclosure filings and 21,301 total completed foreclosures.

In spite of growth in recent quarters, however, the total number of completed foreclosures fell during the first three quarters of the year when compared to the same period last year. The total number of completed foreclosures, totaling 14,971 during the first 9 months of 2009, fell 8 percent when compared to last year’s 9-month total of 16,265.

“The fact that completed foreclosures have been flat or falling as new foreclosures have risen is certainly a credit to our housing counselors,” said Stephanie Riggi, manager of the Colorado Foreclosure Hotline’s call center. “Plenty of new people are entering the foreclosure process, but fortunately, many of them are finding help with housing counselors and by using strategies such as loan modifications that don’t lead to a full foreclosure.”

Riggi noted that calls to the Hotline (877-601-HOPE) have increased and the Hotline has received more than 3,000 calls each month since August of this year.

New foreclosure filings increased 18 percent from last year’s 9-month total of 29,852 to this year’s total of 35,112.

Changes in foreclosure activity varied by region. Comparing the three quarters of 2009 to the same period last year, the report notes that Adams, Arapahoe, and Denver Counties all experienced significant declines in total numbers of completed foreclosures. Denver’s completed foreclosure totals fell 34 percent while Adams County and Arapahoe County both fell 20 percent.

The largest increases in completed foreclosures were found in counties outside of metro Denver. For the first 9 months of the year, El Paso County reported an increase of 18 percent over the same period last year, while Mesa County reported an increase of 173 percent. Weld County, which has been among counties with the highest foreclosure rates in recent years, appears to have moderated significantly with an increase of only 2 percent. All other metropolitan counties reported decreases.

Some smaller counties have been driving increases as well. According to the report, medium-sized counties like Montrose, Chaffee, Park, La Plata, and Eagle Counties all reported significant increases in new activity in completed foreclosures. La Plata County, for example, reported a 300 percent increase while Eagle County reported an increase of 194 percent.

Foreclosure activity in Colorado has increased in recent quarters following the end of moratoria

Observers noted that an increase in foreclosure activity during recent quarters had been expected. Many lenders and investors had enacted both formal and informal moratoria on foreclosures which slowed down the foreclosure process for many. As these moratoria were phased out, officials expected to see an increase in the number of new foreclosures. As a result, both foreclosure filings and completed foreclosures have grown each quarter since the first quarter of this year.

“Due to the moratoria and the changes in law, foreclosure totals dipped quite a bit at various times during 2008 and early 2009,” said Ryan McMaken, a spokesman for the Division of Housing. “We seem to have worked through much of that now and the trend points toward a situation in which foreclosures are not increasing rapidly, but they’re not going away either.”

In spite of recent decreases in foreclosure totals in Adams, Arapahoe and Denver Counties, high foreclosure rates persist. Adams County reported a rate of 74 households per completed foreclosure, while Arapahoe and Denver Counties reported rates of 104 and 113 respectively. The rate in Boulder County, by contrast, was 329 households per completed foreclosure, while Mesa County reported 283 households per completed foreclosure.

The counties with the lowest foreclosure rates included Garfield and Pitkin Counties where there were 619 and 654 households per completed foreclosure, respectively.