Colorado Foreclosures Slow Down but State Still Among Top

by Donald Hanz on Bank of America Foreclosures

Colorado foreclosures slowed down in the first half this year, but the state was still among the top ten states with the highest percentage of foreclosure. The slowdown in state foreclosures, however, is seen in the monthly charts, such as in May and in June when Colorado was replaced by Maryland in the tenth place.

For the period from January to June, a total of 30,177 Colorado homes entered foreclosure, marking a nine-percent drop from the previous quarter, but a 13.6 percent increase from the same period in 2009. Of this six-month total, more than 15,200 homes were notified of default or foreclosure in the second quarter, indicating a five-percent fall compared to the preceding period, but an increase of 4.7 percent from the second quarter in 2009.

Out of the over 15,200 units in default or in foreclosure, more than 5,200 units entered foreclosure house listings while a total of 10,055 units entered preforeclosure, with a large number entering list of foreclosure short sales. Short selling as a strategy to avoid foreclosure has been growing in popularity as several foreclosure prevention programs such as the federal Home Affordable Modification Program has not been able to cut down Colorado foreclosures as substantially as expected.

For instance, charts on Suntrust foreclosures by state still include Colorado as among the states where a number of distressed homes are located. In the HAMP report issued by the Treasury Department on the performance of mortgage lenders through May, only 11,383 troubled mortgage loans were modified, with 6,423 mortgages put into trial modification and 4,960 put into permanent modification. Total trial and permanent modifications in Colorado accounted for only 1.4 percent of the overall total of loan modifications in the country through May despite being among the top ten states hit by the housing crisis during several months over the past 12-month period.

Despite the top-ten ranking of Colorado in the first half, the month-over-month decline in Colorado foreclosures in May and in June indicates that the housing sector has started to recover in Colorado.