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State's foreclosure rate drops to No. 7 in nation

Filings fall 3.8% from October '06, RealtyTrac says

By John Rebchook, Rocky Mountain News (Contact)

Published December 1, 2007 at 12:05 a.m.

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There are some signs that the foreclosure crisis in Colorado may be drawing to a close.

California-based Realty- Trac's latest national report included the most encouraging news yet on foreclosure activity.

"Colorado is zigging when everybody else is zagging," Rick Sharga of RealtyTrac said Friday, noting how Colorado has improved compared with other states.

"Your numbers are looking pretty good," he said.

Colorado's foreclosure rate was ranked No. 7 in the nation in October, according to RealtyTrac. For much of last year, Colorado's rate led the country.

The report shows 4,296 filings statewide in October - one for every 382 households. That is a 14.5 percent drop from September and a 3.8 percent drop from October 2006.

By contrast, the No. 1 state, Nevada, showed a 196 percent increase from October 2006.

Sharga said the state's efforts, such as the Colorado Foreclosure Hotline, may be paying off.

"Also, Colorado was sort of the canary in the coal mine," Sharga said. "Colorado was one of the first states to start having foreclosure problems, and it is not inconceivable that it will be one of the first to emerge. That will not be bad news for your local economy."

Ryan McMaken of the Colorado Division of Housing, which created the hotline in October 2006, said the data indicate that foreclosures, while sure to set a record this year, may be starting to turn around.

His research has shown that in the third quarter, for example, there were 1,788 foreclosure filings in Denver, a 21.6 percent drop from the 2,151 in the second quarter.

"That's the most dramatic drop I've seen in all counties so far," McMaken said. "My preliminary numbers are showing a leveling-off (all counties) in the third quarter from the second quarter. Overall, things are pretty much flat."

However, foreclosure activity is still up substantially from 2006, he said.

"By the end of 2007, I think we're going to see about a 30 percent increase from 2006," he said.