Thursday, May 13, 2010

New foreclosures filings up 6 percent in Colorado

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New foreclosure filings rose to 11,136 in Colorado during 2010’s first quarter, rising 6 percent over 2009’s first-quarter total of 10,509. Compared to 2008’s first-quarter total of 11,634, first-quarter filings this year were down 4.3 percent. According to a report released Thursday by the Colorado Department of Local Affairs’ Division of Housing, 2010’s first quarter filings were down 1.3 percent compared to 2009’s fourth-quarter total of 11,282.

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.

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.

“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. Fortunately, the number of new filings has started to go down again,” McMaken said.

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,”

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.

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.”

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 approximately four months 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 curing the foreclosure.