Colorado is on track to top the record of 39,900 foreclosure filings set in 2007 as widespread unemployment makes it harder for borrowers to make their mortgage payments.
New foreclosure filings statewide during the third quarter reached a record high of 12,468, according to a report released Thursday by the Colorado Division of Housing. New filings for the first nine months of the year were up 18 percent to 35,112, compared with 29,852 during the same period a year ago.
“I can virtually guarantee 5,000 more are going to happen,” said Ryan McMaken, spokesman for the Division of Housing.
McMaken said he does not expect the number of completed foreclosures — those in which the home is resold — to top the 2007 record of 25,000. He said it instead could decline for a second consecutive year.
The number of completed foreclosures grew to 5,618 in the third quarter, the second consecutive quarter-over-quarter increase. But the total number of completed foreclosures fell to 14,971 during the first three quarters, compared with 16,265 during the same period last year.
Industry observers say completed foreclosures are down because borrowers are seeking help with loan modifications from Colorado’s foreclosure hotline.
“Loan modifications are being offered in record numbers,” said Shannon Peer, director of housing counseling at Brothers Redevelopment. “Counselors are working with borrowers to get them into trial modifications, and we are starting to see some of the permanent modifications come through.”
Unemployment rather than adjustable-rate and subprime mortgages is now driving the increase in foreclosure filings. Prime fixed-rate loans to borrowers with good credit accounted for nearly 33 percent of new foreclosures nationwide last quarter, according to the Mortgage Bankers Association. That compares with 21 percent a year ago.
The report from the Mortgage Bankers Association also found that nationally, 14 percent of homeowners with a mortgage were either behind on payments or in foreclosure at the end of September. It was a record high for the ninth consecutive quarter.
More expensive homes are being increasingly affected by foreclosures, and housing counselors are getting more calls from high-end borrowers wanting loan modifications, Peer said.
Changes in foreclosure activity varied by region. The largest increases in both filings and completed foreclosures were outside the Denver area.
For the first nine months of the year, El Paso County reported an increase in completed foreclosures of 18 percent over the same period last year, and Mesa County showed a 173 percent rise. Completed foreclosures in La Plata County rose 300 percent compared with last year, and Eagle County reported a 194 percent increase.
“We used to consider these areas kind of immune to foreclosures,” McMaken said.
The Associated Press contributed to this report.
Margaret Jackson: 303-954-1473 or mjackson@denverpost.com
