Surge in Colorado Foreclosures Attributed to Moratoriums

by Simon Lindsay on Foreclosures

The surge in Colorado foreclosures in the first quarter is attributed by state housing officials partly to the moratoriums implemented in late 2008 and in early 2009.

Officials explained that nationwide moratoriums such as those carried out by Fannie Mae and national mortgage lenders and servicers cut down the total of completed foreclosures in the first quarter last year to 4,354, widening the difference between the first-quarter total last year and the first-quarter total this year.

A total of 6,686 units were posted for foreclosure sales in the first quarter this year, marking a staggering jump of 53.6 percent year-over-year, based on figures from the Housing Division of the Colorado Department of Local Affairs. Those that were not purchased by bidders at the public auctions became bank foreclosed homes.

Similarly, the number of pre foreclosures in Colorado increased by 6 percent to a total of 11,136 postings, compared to the 10,509 pre foreclosure actions filed one year earlier. However, when compared to the 11,634 total pre foreclosures in 2008 and the 11,282 pre foreclosures in the previous quarter, pre foreclosures in the first quarter decreased by 4.3 percent and 1.3 percent respectively.

Just like in other states, the percentage of government foreclosures in total foreclosure counts in Colorado also increased year-over-year, as Fannie Mae and other government agencies also implemented moratoriums in early 2009.

A report from a mortgage firm said that seriously delinquent FHA loans accounted for almost 9 percent in March and that the total number of FHA mortgages now has spiked to more than 6 million with an overall total loan balance of over $800 billion.

State housing officials said that the number of Colorado foreclosures sold at public auctions in the first quarter this year marked the highest total since the July-September quarter of 2007. They contended that the over 12,000 quarterly filings since the middle of 2009 in Colorado have pushed the number of bank owned properties and other completed foreclosures in the first quarter this year.

Based on monthly foreclosure data from the housing division, there was a gap of six to eight months between changes in new foreclosure postings and subsequent changes in foreclosure sales.

Among counties in Colorado, the highest rate of increase year-over-year in new foreclosure postings was posted by Mesa County, with a spike rate of 126.9 percent. The Weld area, on the other hand, posted the highest foreclosure rate among metro areas, with one foreclosure sale for every 178 homes in the area.

The lowest rate of foreclosure was posted by Boulder County, with one foreclosure sale for every 605 homes. Denver County posted a rate of 329 homes per foreclosure sale.

Foreclosure activity also slowed year-over-year in the counties of Adams, El Paso, Denver, Larimer and Pueblo. According to housing counselors in the area, the state foreclosure counseling program achieved some of its goals. A total of 2,473 distressed homeowners attended counseling programs and were able to save their homes through loan modification and short sale.

Nonetheless, unemployment still drove a large number of Colorado foreclosures. The state lost more than 64,000 jobs since March 2009.

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