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Colorado remains on the Top 10 list it has never wanted to be on.
Colorado ranked tenth in May for its foreclosure rate, according to a report released today by RealtyTrac. RealtyTrac, based in Irvine, Calif., found that total foreclosure activity in May fell by 13.6 percent in May from May 2010, less than half of the 33.4 percent year-over-year drop for the entire nation. However, on a consecutive month basis, Colorado showed a greater percentage drop, with the foreclosure rate falling by 4.4 percent, compared with just under a 2 percent drop average drop across the country from April.
RealtyTrac tracked a total of 4,187 Colorado properties in some stage of foreclosure – from the initial notice to the real estate sale at the public trustee public auction – in May. In Colorado, one out of every 518 households were in some stage of foreclosure, compared with one out of every 605 households for the nation.
Ryan McMaken, of the Colorado Division of Housing, who analyzes the state’s foreclosure rate by using a different methodology, noted that Colorado continues to hover around the national rate and its ranking is at No. 10 is about where it has been for a long time.
“It looks like there’s very little change here, actually,” McMaken said. “The conflct between the Mortgage Banker Association’s data and the Realtytrac data continues since the MBA data continues to show Colorado falling behind other states, but the state is holding steady in the Realtytrac rankings. The drop in foreclosures in this report further reinforces almost everything else we’re seeing in Colorado trends right now. However, it’s curious that the year-over-year change in the Realtytrac report is much smaller than our own reported year-year-over changes of 20 and 24 percent for sales and filings, respectively. The month-over-month decline was expected, of course, since May tends to be a lighter month for foreclosure activity.”
National snapshot
Nationally, RealtyTrac found 214,927 properties in some stage of the foreclosure process, including default notices, scheduled auctions and bank repossessions in May.
“Foreclosure processing delays continue to mask the true face of the foreclosure situation, although there were some clues in the May numbers of what lies behind that mask,” said James J. Saccacio, chief executive officer of RealtyTrac. “First, activity spiked in May for various stages of the foreclosure process in some states, a pattern that has occurred in several states over the past few months. This pattern provides evidence that lenders are somewhat unevenly pushing batches of bad loans through foreclosure as they overhaul their paperwork and documentation procedures and as they determine that some local markets are able to absorb more foreclosure inventory.
“Second, while the inventory of properties in the foreclosure process has declined steadily over the past six months – thanks in large part to 16 consecutive months of year-over-year declines in new default notices – the inventory of unsold bank-owned REOs increased in April and May even as new REO activity slowed in both of those months,” Saccacio continued. “That points to continued weak demand from buyers, making it tough for lenders to unload their REO inventory. Even at a significantly lower level than a year ago, the new supply of REOs exceeds the amount being sold each month.”
