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New Colorado Foreclosure Report
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Colorado Foreclosures by county. Credit: RealtyTrac
The Colorado Division of Housing recently published a 16 percent increase in foreclosure filings in 2008 over 2007, in its New Statewide Foreclosure Report.
The good news in the report is Denver and Pueblo County have posted fewer foreclosure filings for 2008 than last year.
What does foreclosure mean?
The foreclosure process starts after a borrower has missed mortgage payments and the Public Trustee, which process deeds of trusts and foreclosures, has sent the borrower a Notice of Election and Demand because the homeowner did not up hold their agreement in the deed of trust to pay the mortgage.
It doesn't mean they are going to immediately lose their home. Foreclosure takes time. The bank has to file proceedings with the court to seize the home, or collarteral, the loan is on. The bank doesn't want the home. The bank wants the mortgage payments. Foreclosure is an expensive proposition for the bank costing on average $60,000, add to their loss a 20-25% reduction of the loan's value.
Once a borrower is experiencing a hardship and finding it a challenge to make payments on their home loan then they may want to consider a short sale. This is a negotiation with the bank who holds the loan against the home. The seller is asking the bank if they may sell their home for less than what the current balance on their loan is - at the bank's approved price. When working with the bank's loss mitigation manager to negotiate a short sale the seller must be in foreclosure, the bank will want to review the seller's monthly net income, monthly expenses, listing agreement and reason for hardship prior to approving the short sale. The goal is for the bank to get what it can for the home, their collateral for the loan, and prevent the seller from having a foreclosure black mark on their credit report for 7 years.
The negative impact foreclosures and short sales have on the market is felt when other sellers are trying to get the most for their homes and the inventory of homes being sold at a discount bring down the home's market value.
Concerned about foreclosure?
There is support for you. Call 877.601.HOPE. This is a free service for Colorado residents. The Colorado Foreclosure Hotline can address questions about home loans.
What does the future hold?
The Colorado Division of Housing report is forecasting a 2008 annual increase of foreclosures to range 10-20 percent compared to 2007. How can you keep this number down? Call for assistance before you go into foreclosure.
