Colorado foreclosures in the first half of 2011 were down 28.2 percent from 2010’s first half — a development one economist attributed to banks continuing to slow the foreclosure process following the robo- signing controversy.
Economist Jeff Thredgold of VectraBank Colorado said banks trying to work through foreclosure documentation have been hit with contradictory and confusing court rulings.
“They are all pulling out their hair,” Thredgold said. “So you’ve seen the major lenders slowing the process down until there is greater clarity about what they can and can’t do.”
He said as a result there is a “shadow inventory” of between 2 million and 4 million homes that may need to go through foreclosure.
In 2010, Bank of America, GMAC and other mortgage companies were accused of rapidly processing foreclosures without proper documentation.
According to the Colorado Division of Housing, new foreclosure filings fell to 15,348 in Colorado during 2011’s first half, falling 28.2 percent from 2010’s first-half total of 21,369.
The report said foreclosure sales at auction dropped during the first half of 2011, falling 13 percent from 12,573 to 10,938, year 0ver year.
A separate report by RealtyTrac Inc. found fewer homes entered the foreclosure process or were seized in the U.S. in July — 59,516 homes received an initial default notice in July, down 7 percent from June.
Ryan McMaken, division spokesman, said the Colorado foreclosure figures were good news tempered by the fact that a significant number of homes remain in the foreclosure pipeline.
“We are going in the right direction because the number of foreclosures is down,” McMaken said.
But the fact that foreclosure sales at auction are holding steady “tells me that we have a ways to go, that there are still a lot of properties in the foreclosure process that must be dealt with,” McMaken said.
Shannon Peer, who oversees the Colorado Foreclosure Hotline, said the figures are encouraging.
“From our perspective, any decline is great news,” Peer said. “It is a positive factor.” He doesn’t believe foreclosures will return to 2009 or 2010 levels that were the result of people being placed in terrible loans.
Howard Pankratz: 303-954-1939 or hpankratz@denverpost.com
