By John Rebchook, Rocky Mountain News
At a time when the country is mired in the worst foreclosure crisis since the Great Depression, the Denver area is bucking the trend by seeing the first year- over-year decline in foreclosures in more than a dozen years.
There were 24,494 foreclosures filed with public trustee offices in the seven-county Denver area in 2008, an 11.8 percent drop from the record 27,785 filings in 2007.
Although 2008 was the second-worst year on record, it is a far cry from the 41.5 percent increase in foreclosures posted in 2007 from 2006.
Foreclosures had been rising each year since the mid-1990s, but when the economy was strong in the late 1990s, the increase was smaller than the housing and population growth.
"It is possible that Colorado has gone through the worst of its foreclosure cycle," said Rick Sharga of Irvine, Calif.-based RealtyTrac.
RealtyTrac will release its national foreclosure report Thursday, and the numbers will not be pretty.
"Nationally, we're seeing huge increases," Sharga said.
Mike Rinner of the Genesis Group, which tracks housing along the Front Range, said the Denver area, which suffered from rising foreclosures longer than the rest of the country, is coming out faster than most of the nation.
"I think it is a sign of times," Rinner said. "I think the market is ready to start on the upward track. But I think it is going to be a long slog."
Neither Sharga, Rinner nor anyone else is saying the foreclosure crisis in the Denver area is over.
"I think the decline in foreclosure filings is attributed to a few things, not any one thing," said Carol Snyder, public trustee for Adams County.
She pointed to lenders "putting a hiatus" on new foreclosures at least temporarily. Lenders are more willing to work with borrowers to avoid foreclosures through things such as short sales, where the lender accepts less than the loan amount. And more affluent homeowners now are running into problems making mortgage payments, while in the past it was primarily low-income people who had few alternatives other than foreclosure.
"I think the decrease in the number of filings has been somewhat of a blip to the extent that when the hiatus goes away, we could be dumped with a higher number of foreclosures again," Snyder said.
Sharga also pointed to the success of the nonprofit Colorado Foreclosure Hotline.
Spokesman Ryan McMaken said that at least 9,000 homeowners have avoided foreclosure because of the hotline during the past two years.
"If we simply added those people back in, we would have seen another record year," McMaken said.
"Our hotline data is showing that people are calling sooner than they used to," McMaken said. "They used to call when they were three months or more behind, while now a larger percentage are calling when they are still current on their payments."
Shannon Peer of Brothers Redevelopment, which runs the hotline, said that "obviously, there is no reason to send my counselors packing," because of the drop in foreclosure filings. "But any indication that we might see some start or signal in a retreat in (foreclosures) is good news."
Peer said that the number of calls to the hotline has more than doubled from a year ago.
Sheila Smith of Your Short Sale Solutions works with lenders and homeowners to keep people out of foreclosure.
"Lenders are working with homeowners more with options like short sales, interest rate modifications and even principal reductions," Smith said.
Denver County showed the biggest decrease in foreclosure filings last year, both in total numbers and as a percentage drop.
It had 6,145 filings in 2007, a 25 percent drop from the 8,240 in 2007.
Denver City Councilman Michael Hancock, who in 2007 launched a Foreclosure Task Force, said he thinks the drop in foreclosures may be because many people who had the riskiest mortgages have worked their way through the system.
"That is tremendous news, but we're not out of the woods yet," Hancock said. "Now my biggest concern is that people who have safe fixed-rate loans and good credit may lose their homes if they lose their jobs."
Posts
