Foreclosure numbers hit new high

By Dan MacArthur
North Forty News

Property foreclosures hit a record high in Larimer County in 2007 with Wellington posting one the greatest rates of increase.

Public Trustee Debby Morgan predicted foreclosures would hit 1,500 as filings hovered near that figure with the year drawing to a close.

If so, that would represent a nearly 20 percent increase over the 1,253 foreclosure filings in 2006. The 2007 increase still would fall short of the record increase set in 2006, when the rate of foreclosures jumped 33 percent from 2005.

Contributing to the record number is a 39 percent increase in Wellington foreclosures from 71 fillings in 2006 to 99 two weeks before arrival of the new year, according to figures provided by the trustee's office.

Morgan said she can only surmise that the dramatic hike in Wellington foreclosures is due to the abundance of more affordable new subdivisions there. They typically attract first-time homebuyers of modest means who suddenly find themselves financially strapped when adjustable-rate mortgages move upward.

But it would be difficult applying such an explanation to Estes Park, which led the pack with a 121 percent increase from 19 foreclosures in 2006 to 42 near the end of 2007.

Berthoud tallied a 29 percent increase from 45 in 2006 to 58 in 2007. Loveland followed with an 18 percent increase in foreclosures from 469 to 553. Fort Collins posted an 11 percent increase from 550 to 610 during the same period.

Based strictly on the numbers, the smaller communities in the county also realized dramatic increases in foreclosure rates. But such statistics become increasingly misleading with such low numbers. The LaPorte rate remained steady with 12 foreclosures filed in 2007 compared with 11 in 2006. Livermore filings were down to 16 from 22. The Red Feather Lakes rates increased from five to nine, and Timnath filings doubled from one to two.

About the only bright spot is that the per capita rate of Larimer foreclosures was among the lowest among Front Range counties. Foreclosures here total one for every 97 households. That compares with a high of one per 32 in Adams County and one per 41 in neighboring Weld County. The statewide average was one foreclosure per 64 households.

The foreclosure situation is similar statewide. According to the Colorado Division of Real Estate, more Colorado homeowners have gone into foreclosure in the first nine months of this year than in all of 2006--which also was a record statewide.

In its third-quarter survey issued mid-December, the division reported that 28,960 foreclosures were filed through September compared with 28,509 in all of 2006.

Ultimately, the division expects that 2007 foreclosures in the state will increase to some 37,000--30 percent greater than in 2006, which was 31 percent more than 2005.

Further, the report notes that almost two-thirds of homeowners entering foreclosure are losing their homes at auction in contrast to about half of those facing foreclosure in 2006. According to the report, there were 19,025 foreclosure auction sales through September, compared with 15,112 in the same period in 2006.

"We don't think we've bottomed out yet," said state real estate division director Kathi Williams.

While foreclosure filings are a reflection of the number of property owners in financial distress, they do not necessarily reflect the number of properties that go to auction. Lenders can initiate foreclosure after borrowers fall three months behind in mortgage payments. But foreclosures still can be withdrawn if borrowers "cure" the mortgage by paying the delinquencies and costs associated with the foreclosure.

Beginning this year, borrowers have almost four months before the sale to cure a mortgage, but will no longer have time to do so after the sale. Inability to cure the loan results in a traumatic foreclosure sale in which lenders typically take possession of the property and borrowers usually lose their home and any equity in it while damaging their credit rating.

Williams, also co-chair of the Foreclosure Prevention Task Force, contended that the numbers would be greater without the Foreclosure Hotline.

"Our records indicate that at least 5,600 households that have sought counseling through the hotline over the last year have avoided foreclosure," she said. "The greatest impact of that is likely seen in the number of foreclosure sales. So without the hotline, we might be looking at 24,500 foreclosure sales instead of 19,000."

According to a report by the California-based RealtyTrac, Colorado posted the fourth-highest foreclosure rate of all states during November. Greeley was reported to have the seventh-highest foreclosure rate among cities across the nation.