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Metro-area foreclosures decline

Drop of 24.5% may be result of new state law

By John Rebchook, Rocky Mountain News (Contact)

Published October 8, 2008 at 12:05 a.m.

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Denver-area foreclosure filings plunged by 24.5 percent in the third quarter from the same period in 2007, but the decrease does not signal that the metro region is off its record foreclosure pace.

Rather, the lull reflects the impact of a new state law, House Bill 1402, that reduced foreclosure filings to a crawl in August.

For example, the Denver Public Trustee office processed 609 foreclosures in August 2007, but only 148 last August.

The bill, which took effect Aug. 1, requires lenders to send borrowers written notice at least 30 days before an interest rate change or foreclosure is filed, as well as information directing borrowers to counseling resources, including the Colorado Foreclosure Hotline.

"Most lenders chose to mail out the 30-day notice in August, slowing down foreclosures for that month," explained Sindee Wagner, Denver's chief deputy public trustee. "We will be back up considerably in October," Wagner said.

There were 4,406 foreclosure filings in the third quarter, compared with 5,840 in the third quarter 2007.

In Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas and Jefferson counties, there were 18,990 foreclosure filings in the first nine months, compared with 18,921 in the first nine months of 2007.

"We're still seeing pretty high levels of calls," said Shannon Peer, director of housing counseling at Brothers Redevelopment, which runs the state's foreclosure hotline.

It received 2,076 calls in August, almost 26 percent more than the 1,646 in August 2007. In September, it received 1,968 calls, 12 percent more than the 1,752 in September 2007.

The good news, Peer said, is that mortgage service companies are working more with homeowners who are in trouble to modify their loans.

Peer said Brothers is researching whether Colorado homeowners who are either in or facing foreclosure will be helped by the recent $8.4 billion settlement announced by Bank of America, which bought Countrywide Mortgage, to restructure 400,000 loans across the country.

Jason August, principal of Gourmet Real Estate, said he recently completed an analysis of real estate sales in the Denver area and found that 27.5 percent were distressed homes.

Comments

  • October 8, 2008

    8:59 a.m.

    Suggest removal

    jlgraybill writes:

    John Rebchook,

    I've beat you up enough in previous article posts, that I wanted to commend you for your reporting in this article.

    Thanks for looking past the drop of 24.5% in foreclosures and identifying an extremely likely reason for that drop. This article actually shows professional journalism, by not placing a non-existent positive spin on a figure that most likely isn't a result of reduced foreclosures. Thanks a lot, and keep the attention to reporting the details as shown in this article.

  • October 8, 2008

    11:33 a.m.

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    denvernorthwest writes:

    that new law is a good thing. a lot of foreclosures can be avoided if the home owner would seek help. There are so many hotlines available now. I can't believe how much ostrich syndrome there still is. Denial is not a river in egypt.

  • October 8, 2008

    5:10 p.m.

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    WarrenJimmyBuffett writes:

    Foreclosure is a nature economic process if the person with the mortgage cannot afford it. I'll never understand the mindset of keeping someone in a home they cannot afford.

  • October 14, 2008

    8:46 a.m.

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    FightJobs writes:

    Agreed....the days of getting someone a No Income/No Asset (NINA loan) with a 600 midscore are long behind us, BUT this is just the residential side....remember, there is the other side (Commercial Mortgages) that hasn't come down the foreclosure pipeline just yet.