Go to the mobile version of this Web site.

Login | Contact Us | Site Map | Paid archives | Electronic edition | Subscription Questions | Extras

Foreclosure rate soars 41.5%

'07 area filings top 26,300 with no end in sight

By John Rebchook, Rocky Mountain News (Contact)

Published January 3, 2008 at 12:05 a.m.
Updated January 3, 2008 at 9:25 a.m.

Text size  

More Real Estate

More stories »

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 area economy for years, and the trend has swept across the country.

In August, Bartlett started tracking the number of 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 owned by lenders or the Department of 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 undercounting 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. "We're seeing foreclosures in all price ranges, from $1 million homes all the way down to $100,000 homes, going into foreclosure."

A new state law went into effect 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 rare occurrence.

"The best thing about the process is that it gives our counselors at Colorado Foreclosure Hotline (1-877-601-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 Dec. 15. They were able to help him refinance into an FHA Secure 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 3, 2008

    4:18 a.m.

    Suggest removal

    gwats writes:

    An extra 75 days for most of these folks is the equivalent of re-arranging the deck chairs on the Titanic while it's listing at a 30 degree angle. They have been foolish and irresponsible and free spending with the Dollars and most of these anal retentives are not willing to make sacrifices or lifestyle changes that would help them keep their homes.
    While there may be some true 'victims' in this mess, most of these borrowers went in with eyes wide shut, gambling that their homes would increase in value enough so they could refinance and throw in those high-rate credit cards and expensive SUVs. They gambled and LOST.
    I've got the same sympathy level I would have if they got on a plane to Vegas and gambled away the house payments on the slots or Blackjack.........none.
    What harm would have come to them if they had consulted a outside financial adviser BEFORE going to the Closing? I've signed three 30 year mortgages and I knew to the LETTER what those documents said.

  • January 3, 2008

    9:12 a.m.

    Suggest removal

    WarrenJimmyBuffett writes:

    Gwats, You were making a good post until you had to be full-of- yourself at the end. If you knew to the LETTER what those documents said, you need a hobby or a life.

  • January 3, 2008

    11:11 a.m.

    Suggest removal

    DenverTea writes:

    Hey, I worked for a mortgage broker in the early 2000's, and I finally had to get away from his company out of disgust - he was encouraging his clients toward ARMS, (I am not a genius or anything, but even I remember the ARM mess of the 1970's), and ridiculous refinances and etc....yes most were silly silly people for buying it, but some of them were just really not bright or were elderly. He justified his actions by trying to say we were "helping" people get the home they deserved and other such bullsh*t. I hope that he and others like him will reap what they truly deserve out of this - what a jerk. I despise greed, which is what lies at the root of this, and is one of the root causes for the shape our country is in right now. See www.g-r-e-e-d.com for more.
    Tea

  • January 3, 2008

    12:55 p.m.

    Suggest removal

    seeingeyeseesall writes:

    When the data available shows that over 55% of the people who were steered into ARMs could have qualified for fixed rates that they could have afforded now because brokers received much higher commissions on ARMs and put people into them when they weren't even "sub-prime" ... this is "go to jail fraud," not just sad.

  • January 3, 2008

    2:18 p.m.

    Suggest removal

    HolierThanThou writes:

    An Adjustable Rate Mortgage is nothing more than an invitation to get screwed out of your home. Don't expect this form of robbery to be outlawed while the current batch of crooks are running the country.

    All lenders are predatory. They produce nothing but paper and confusion. They make a lot of money doing that because we tolerate it.

    Here's what would fix the problem and re-acquaint the mortgage business with fairness and reason: make it a law to burn down every house that goes into foreclosure after locking the lenders inside.