Wed March 16, 2011

New Foreclosure Filings in Colorado at 30-Month Low

State officials say new foreclosure filings in urban and suburban areas in Colorado have slowed but it's not necessarily because conditions are improving.

The Colorado Division of Housing said Wednesday that foreclosures in 12 metropolitan counties have dropped to a 30-month low.  There were a total of 1,986 new foreclosure filings in February in Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, El Paso, Jefferson, Larimer, Mesa Pueblo and Weld counties. That's down almost 35% from February 2010.  While that may be a bit of good news, there is still a problem out there.

“Of course foreclosures are closely tied to the overall demand for housing.  And what we have seen is that, since the demand for purchase housing has dropped off over time, that makes it harder for people to sell their homes and that drives the foreclosure totals a bit, because now people can’t sell their homes for as much as they owe,” says Division of Housing Spokesman Ryan McMaken.

One reason for the lower filing number is mortgage servicers have been slow in processing foreclosures following a "robo-signing" scandal that emerged last fall, when some lenders were accused of signing paperwork without checking their accuracy.

Still, some credit the Colorado Foreclosure Hotline for some of the drop.  The free service connects homeowners with certified housing counselors, at a time when legitimate help is sometimes hard to come by.

“There are thousands of scam companies or individuals that advertise and guarantee services or delivery of services that really puts the homeowner at risk of losing thousands of dollars and still not being in a better situation or position than when they started,” says Shannon Peer. He is the director of housing counseling at Brothers Redevelopment, which administers the Colorado Foreclosure Hotline.

Since it started in 2006 the hotline has taken more than 135,000 calls and helped upwards of 25,000 people avoid foreclosure.  The Colorado Attorney General’s office announced this week they are awarding the hotline $600,000.  That money, from settlements with Countrywide Financial and Wells Fargo will go toward outreach and training, among other things.

Comparing year-over-year, foreclosure filings fell 34.7% in February, and year-to-date comparisons show that for the period including both January and February this year, foreclosure filings are down 18.8% when compared to the same period last year.  There were 1,986 new foreclosure filings during February 2010 in Colorado’s metropolitan counties, compared to February 2010’s total of 3,042.

The number of homes completing the foreclosure process with a sale at auction also fell by almost 20% from a year earlier.