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2008 seen as peak for Colorado foreclosures

Expert hopeful after state unveils report on housing

By John Rebchook, Rocky Mountain News (Contact)

Published August 6, 2008 at 9:26 a.m.

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An abandoned home waits for a buyer in the Montbello neighborhood, which has been hit hard by foreclosures. But Zachary Urban, who runs the Colorado Foreclosure Hotline, says he's hopeful the crisis may peak this year and "this might be the beginning of the end."

Photo by Chris Schneider © The Rocky

An abandoned home waits for a buyer in the Montbello neighborhood, which has been hit hard by foreclosures. But Zachary Urban, who runs the Colorado Foreclosure Hotline, says he's hopeful the crisis may peak this year and "this might be the beginning of the end."

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Experts are cautiously optimistic that the foreclosure crisis in Colorado may hit its apex this year.

"We are going to have a record year," said Zachary Urban, who runs the Colorado Foreclosure Hotline. "What we're seeing for 2008 is that this may be the peak foreclosure year. Hopefully, next year we will see an actual decline," said Urban, of the nonprofit group Brothers Development.

What made Urban optimistic that "this might be the beginning of the end" is a state report released on Wednesday showing that in the first six months of the year, 22,500 foreclosures were filed in Colorado, an increase of 16 percent from the same period last year, when 19,460 foreclosures were filed.

Statewide, 39,915 foreclosures were filed last year, a 40 percent increase over 2006.

"We're not seeing a drop in the actual number of foreclosures, but we are seeing a slowing down in the rate of increase, which is encouraging," said Kathi Williams, director of the Colorado Division of Housing, which released the report.

Williams attributed the slowdown to the foreclosure hotline, which has received 17,000 calls this year, compared with 12,000 calls during the same time last year. She also credited a change in a state law that took effect on Jan. 1 giving homeowners who are in trouble more time at the beginning of the process to work out their foreclosure.

But Williams noted that homeowners falling behind on their mortgages are still being hammered by a number of forces.

"What we did not envision is how much worse the foreclosure crisis would become nationwide," Williams said. "That means our counselors have to compete with people all around the country to get the loan packages they are working on in front of loan mitigation officers at banks. In our opinion, banks have not done enough to ramp up loan mitigation offices."

Williams said she knows banks aren't hiring many people because their stocks are being hammered.

"But to me, it's pay me now or pay me later," Williams said.

She said that if a bank can keep just one or two homes out of foreclosure in a timely manner, it could more than offset the cost of another loan mitigation officer.

Also, many people facing foreclosure will have trouble qualifying for help, even with the new federal legislation, because they carry too much other consumer debt, Williams said.

Williams said there also are a large number of ARMs resetting nationally and in the Denver area, which could mean another wave of foreclosures.

Urban said he has heard estimates that there are about 13,000 homeowners in the Denver area in danger of losing their homes who have not yet begun the foreclosure process.

"It's not like there are only going to be 15,000 foreclosures in 2009," Urban said. "We are just optimistic that it won't be quite as bad as 2008."

Williams said it will take strong home appreciation to end the foreclosure crisis.

Comments

  • August 6, 2008

    2 p.m.

    Suggest removal

    Chadley25 writes:

    The rise fell?

    Glad I wasn't the only one who thought that was a bizarre headline. Might I suggest "Rate of Colorado foreclosure filings slows to 16%"?

  • August 6, 2008

    2 p.m.

    Suggest removal

    RBN writes:

    LOL, I had to open the artilce too just to figure out what they were trying to say.

  • August 6, 2008

    2:14 p.m.

    Suggest removal

    HolierThanThou writes:

    Must be rough trying to put a positive spin on this.

    Foreclosure filings rise 16% from last year. Just say it.

    Sure must hurt to explain the bad results of the conservative economic policies. Tax cuts for the wealthy, outsourcing jobs to China, busting labor unions, cutting paychecks, massive mega-bonuses to slacker executives while employees get pushed out the door, all this stuff causes people to get evicted from their homes.

    You know who really needs to be evicted?

    Conservative kiss-up politicians and their executive bribe masters, that's who. And maybe a few editors and reporters who are trying to put a positive spin on their incompetence.

  • August 6, 2008

    6:26 p.m.

    Suggest removal

    oceanview78382 writes:

    Holier - Present real evidence that conservative politicians are responsible for the housing crisis. Many who took out loans were not qualified and loan companies didn't care. A friend of mine's 20 year old college kid told her dad she needed to build her own credit so she went to Countrywide for a loan - no job yet. Dad thought she would get a loan for maybe $80k and wasn't too concerned. She came back "Dad I was approved for $200k" My friend -her dad had a cow - I thought it was hilarious.

    I'm an independent and appreciate real - true conservatives if they really care about taxes and spending. Unfortunately Bush and now McCain think this war is a good investment. I thought the Dems were bad with social programs, but the GOP has outdone them by many times with the one trillion wasted on the war.

    Ron Paul where are you? Guess I will go with Obama -but barely over McCain but if it wasnt for the war -- McCain. Udall is especially intelligent and competent- he is an easy choice.

  • August 6, 2008

    9:31 p.m.

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    jlgraybill writes:

    The positive spin is ridiculous...I was hopeful things were improving when I saw the headline, but alas it isn't the case. Is this the business section or the editorial section? Report the truth and the facts, Jack. The number of foreclosures in 2007 was horrible, and the number of foreclosures here in 2008 is 16% worse. How is the main spin on these facts positive as attempted in this article? The facts are the only thing worth reading in this article...unless you all out there are feeling that things are actually "improving". I'm just not seeing it...I'd like to feel otherwise, but I'm seeing more and more foreclosures, for sale signs, and drops in prices. Year over year, things just aren't improving (any month over month increases are good...but they are most likely seasonal as history shows). If someone can actually show me some facts that shows things are improving, please do. I'd like to cure this hangover.

  • August 6, 2008

    10:05 p.m.

    Suggest removal

    WarrenJimmyBuffett writes:

    John,
    Like often, your article titles are a joke. Is it your editors that make you look like a fool? I hope so for your sake.

  • August 7, 2008

    1:29 a.m.

    Suggest removal

    market_man writes:

    HolierThanThou:
    Why don't I say what we are all thinking already.
    Most subprime loans were taken by poor, uneducated, needy people. Maybe democrats/liberals!!
    Why is it that the dems contantly whine? Oh pitty me and all the problems everyone else causes for me (typical lib).
    Why don't you do something positive and constructive and take some responsibility for you actions? I guess that suggestion won't make any sense to you.

  • August 7, 2008

    5:39 a.m.

    Suggest removal

    LOUIE writes:

    Lord fed the multitude, some built thier house upon the sand, others upon the rock. Something to be said for the teachings of good stewartship, wouldn't you say? The one who lives for today, has nothing for tomorrow, lives at the mercy of others generosity. God seems to be a hell of a businessman when debts come due. Seems thier were these lasses with lamps of oil, waitting for the groom; some burned thier supply of oil, other saved for the groom appearence. If not devine knowledge; can humanity at least acclaim it's wisdom?

  • August 7, 2008

    7:29 a.m.

    Suggest removal

    jlgraybill writes:

    So this article was changed by John. Now he presents information from an "expert". A so called "expert" who has "heard estimates that there are about 13,000 homeowners in the Denver area in danger of losing their homes who have not yet begun the foreclosure process." They must not be a real expert if they aren't aware of the facts of the pending Option Adjustable and Alt-A mortgage resets, and how those will create additional foreclosure filings in 2009-2011. This could be larger than the Subprime mess we're in, folks. Only an influx of jobs or more lenient lending standards to allow these homeowners the ability to refinance will slow down this wave of additional foreclosures. So go ahead and try to predict the top of this mess John, but please don't pass it off as journalism. It's only a wild guess and speculation on your part, backed by no substantial proof or data. Passing it off as any more than that is untruthful journalism.

    http://bp3.blogger.com/_pMscxxELHEg/R...

  • August 7, 2008

    9:05 a.m.

    Suggest removal

    HolierThanThou writes:

    Big corporate shill, Bob Woodruff, was on the box last night spreading the usual lies. Too bad he was wounded in Iraq. The Arabs would've done us all a favor if they'd killed him.

    That's an awful cold-blooded thing to say isn't it? Ultimately, my words here haven't cost any American family a job, health benefits, put them out on the street, or moved them to a bad neighborhood where the only job that pays well is cooking meth. Bob Woodruff and his colleagues are complicit in the economic murder of Americans. That's why I'd send him back to Iraq and hope the Arabs don't miss this time.

    He told some of the favorite lies of the conservative big corporate media:

    1. China is helping our economy by only taking "low-paying" American jobs.

    2. China is helping our government by using the money they get from stealing American jobs to sink us into debt.

    Those "low-paying" American jobs what people need to pay their usurious mortgages. Those were manufacturing jobs that paid over twice what the same people would get for peddling Chinese-built crap at Wal-Mart.

    New jobs in "higher order" industries are not forthcoming. Conservatives like to talk about training for the new economy while cutting funding for higher education. Only a rich person can afford tuition anymore. Of course, the other way to get a college education is to (you guessed it) borrow money.

    Helping conservatives to run us all into debt by way of deficit spending is like giving a meth maniac another speedball. The Chinese know all about addiction. The British used opium to control China when they were trying to colonize the place. Now the Chinese Communists have improved on that strategy and they're applying it to our government.

    Tax cuts for the wealthy are like heroin to American politics. Feels good at the top while the rest of the body is barely able to survive the dose.

  • August 7, 2008

    12:46 p.m.

    Suggest removal

    athought writes:

    Hollier: You are the first person I've seen accuse of Bob Woodruff of being a conservative. I agree with you on the drug addiction but I think you mis-identified the drug. Debt is the smack that most Americans are addicted to. Conservatives are all too easy on controlling the rampant drug dealers (banks). That was evidanced by the recent bail outs and Bush's failure to refi the national debt at 4% in the early 2000's. Liberals either want to punish the bankers themselves for making a ton of money or kill the credit market by guaranteeing every mortgage loan with taxpayer debt. The best option would be to get the gov't out of most lending by fully privatizing the GMAs. HUD loans would be miniscule as the lending guidelines haven't changed since the days of old banking where you had to have a real job and have a real downpayment to buy an affordable house. However, with fully privatized GMA's, those who qualify for HUD loans would be able to get cheaper conventional loans somwhere else and surprise, HUD loans aren't at issue in this banking mess. When the American public's healthy adversion to debt returns, the economy will heal. Until then, we can expect to have more of this comming for years to come.