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Foreclosures up 41.5 percent in Denver area in 2007

By John Rebchook, Rocky Mountain News (Contact)

Published January 2, 2008 at 6:46 p.m.
Updated January 2, 2008 at 6:46 p.m.

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The final tally of foreclosure filings in the seven-county Denver area in 2007 represent a 41.5 percent increase over the record filings in 2006.

Last year's 26,326 filings were the equivalent of every home in Littleton and Louisville going into foreclosure.

"Holy cow. That really puts it in perspective," said Brian Bartlett, a broker with RE/MAX Southeast.

There were 18,610 foreclosures in 2006.

Bartlett and others see no slowdown in the number of foreclosures, which have been hammering the Denver area economy for years, and recently has swept across the country.

In August, Bartlett started tracking the number of us foreclosures in Denver's multiple listing service, and found the percentage increases had doubled by the end of the year. At first, about 6 percent of the homes listed for sale were either owned by lenders or the Departmentof Housing and Urban Development and 13 percent of the sold and closed homes were foreclosures.

Now, those numbers have risen to 13 percent and 26 percent, respectively.

"That is consistent with the raw data you have on foreclosures," Bartlett said. "Every week and every month, the numbers have gone up. And that may be under-counting it, because some lenders will not allow the listing agent to put the home in the MLS as a lender-owned."

Arapahoe County Pubic Trustee Ana Maria Peters-Ruddick, said she thinks most of the foreclosures were caused by adjustable rate mortgages skyrocketing, and she sees no end to the trend.

"I think a lot of people got into mortgages they couldn't afford," she said. "They were not well-informed. We're seeing foreclosures in all price ranges, from $1 million homes all the way down to $100,000 homes, going into foreclosure. I don't see any slowdown in the pace."

A new state law went into effect on Tuesday, which gives people who are losing their homes an extra 75 days upfront to work out a deal with their lender. In the past, the high bidder for the foreclosed home - typically the lender - couldn't take title of the home until 75 days after the foreclosure auction by the public trustee. During that time, the borrower could cure the mortgage by paying off the entire loan and any other costs associated with the foreclosure, a fairly rare occurence.

"The best thing about the process is that it gives our counselors at Colorado Foreclosure Hotline (1-877-HOPE) more time to help people, whether it is a short-sale, a regular sale, or a deed in lieu of foreclosure," said Ryan W. McMaken, of the Colorado Division of Housing.

"The new timeline probably will not change the number of filings, but it may slow down the number of homes that end up being sold in a foreclosure," he added.

Since the hotline was started in October 2006, more than 26,000 people have called.

"We even got nine calls on Christmas," although there were no counselors available to take the calls, said Zach Urban, of Brothers Redevelopment, who runs the hotline.

He said they expected the call volume to drop off in December, because "people don't want to deal with it," during the holiday season, but they received 1,533 calls last month, about double the number in December 2006.

They received one call from a Denver policeman saddled with a subprime ARM, who was set to lose his home on Dec. 15, but they were able to help him refinance into a FHASecure loan, allowing him to keep his house.

He was one of the lucky ones, because his house appraised high enough to be refinanced, Urban said. "My concern is that 2007 is going to pale compared with 2008. We haven't seen anything yet."

Realtor Bartlett agreed. "There are still a lot of ARMs out there that are going to reset, so this problem will probably be with us for another two years or so," he said.

rebchookj@RockyMountainNews.com or 303-954-5207

Comments

  • January 14, 2008

    5:05 p.m.

    Suggest removal

    gwats writes:

    Gee. An extra 75 days to throw more money @ a rat hole deal. A lot like re-arranging the deck chairs on the Titanic. I had a neighbor who lost his home to foreclosure and lived there another three months as a squatter in his own former house!
    This story is moving off the front pages, but it's going to have a long lasting effect on this Nation.