New Mesa County Foreclosures Hit 12-Year Low in December

Last time, we saw that "releases of deeds of trust" spiked in Mesa County. That suggests some strong demand for for-sale housing in the GJ metro area.

So, not surprisingly, we also find that foreclosures in the area fell to a 12-year low in the area. In fact, these numbers may be lower than anything we've seen in much more than 12 years, but I only have data going back to 2008. In other words, there were fewer new foreclosures in December 2019 than in any other month during which I collected this data.

Specifically,  during December, there were 11 notices of election and demand.  The "NED filing" is the first step in the foreclosure process. That's down from 17 in November 2011, and it's down from December 2018 when 19 NEDs were filed. As the blue line shows below, the NED filings total is even down from where it was in 2008.

The other measure of foreclosure activity "auction sales" has not dropped off quite as much. The "sale" step of the process is the end of the foreclosure process when the property is auctioned off to a new owner.

During December, a total of five properties were foreclosed and sold at auction. That's a low number, but not the lowest we've seen over the past 12 years. Sales totals have been largely flat over the past year, and have returned to what we saw back in early 2008.  Nonetheless, foreclosure auction sales can be said to be at historic lows.

This follows a general statewide trend. Most Colorado counties have seen big decreases in foreclosure activity with combined statewide totals also dipping near 12-year lows.

Moreover, keep in mind the population of both Mesa County and the state have increased over the past decade, so on a per capita basis, foreclosure activity has fallen well below where they were before 2008.

Foreclosure Sales Hit All-Time Low in September

Foreclosure sales in Colorado's metropolitan counties fell to a total of 95 in September, coming in at the lowest total ever recorded since this survey was begun in 2007. During the same period, there were 415 foreclosure filings.

This continues a multi-year trend of declining foreclosure activity, as we can see in the graph. September's foreclosure sales total was the lowest ever recorded with the next smallest being June's total of 106.

Foreclosure filings, meanwhile, we up slightly from all-time high's but remained near the lowest levels we've seen in the last decade. An all-time low was reached in July of this year when foreclosure filings totals dropped to 394.

These figures are totals for Colorado's 11 most-populous counties, plus Broomfield County. Foreclosure filings are the event that begins the foreclosure process, and foreclosure sales occur at the end of the process when properties are sold at auction, often going to the lender.

In the second graph, we see year-over-year changes in total foreclosure filings and sales. In September 2017, filings were down slightly from September 2016, dropping by 5.25 percent. Foreclosure sales dropped by much more, falling 38.8 percent year over year. As we can see in the graph, both filings and sales have been dropping each month for the past 10 months, and the overall trend for both filings and sales has clearly been downward since 2012.

Many counties differ in their foreclosure trends, and the number of foreclosure compared to the overall number of households can vary considerably.

If we look at foreclosure filings in each county on a per household basis, we find that Pueblo County has the fewest households per foreclosure — only 394 households per foreclosure — while Larimer County has the most — 2,771 households per foreclosure. Note that a larger number means fewer foreclosures in relation to population size. In other words, the larger the number of households per foreclosure, the lower the "foreclosure rate."

Also note that the counties with the lowest foreclosure rate tend to be higher-income counties such as Boulder and Douglas counties. Pueblo, Mesa, and Adams counties, on the other hand — which have higher foreclosure rates — have lower overall income levels.

A similar trend holds when we make the same comparisons using foreclosure sales. Pueblo has the fewest households per foreclosure sale (2,723) while Broomfield County reported no foreclosure sales at all.

Some counties are certainly more foreclosure-free than others. But, even those counties that have some of the highest foreclosure rates, relatively speaking, are still way down in their foreclosure totals from what we were seeing back in 2009 and 2010. Foreclosure activity continues to be at very low levels across all metro areas for now.

(This data is collected from the Public Trustee in each county.)

Colorado Metro Foreclosures Hit New Low in September 2016

During September 2016 in Colorado's metro Counties, there were 438 new foreclosure filings. That's the lowest total ever recorded since I began tracking monthly totals in 2007. September 2016's total was down 13.2 percent from September 2015 when new foreclosure filings totaled 505.

"Filings" refers to "notices of election and demand" which are the first step in the foreclosure process. Filings had peaked at 4,030  in December 2007, but September 2016's total was down 89 percent from that peak. 

Foreclosure "sales," which are the point in the foreclosure process where foreclosing properties are sold off at auction, are also down considerable from the 2008 peak. during September 2016, there were 158 foreclosure sales in the metro counties. That's down 38 percent from September 2015, and it's down 94 percent from the peak of 2,706 in January 2008. 

Due to high price inflation for homes — and the related phenomena of high demand, moderate new construction, and rising population — foreclosure totals continue to decline, and show few signs of increasing substantially barring a significant change in current economic conditions. 

The counties included in this analysis — which constitute around 85 percent of statewide activity — include Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, El Paso, Jefferson, Mesa, Pueblo, and Weld counties. This data is collected from each county's public trustee office.

Colorado foreclosures fell 8.4 percent in 3rd quarter

During the third quarter of 2015, Colorado public trustees reported 2,058 foreclosure filings and 1,089 sales at auction (completed foreclosures).  During the third quarter of 2014, there were 2,246 filings and 1,433 sales. Comparing year-over-year for the third quarter, foreclosure filings fell 8.4 percent and completed foreclosures fell 24.0 percent.

Comparing the third quarter of 2015 to the second quarter of 2015, foreclosure filings fell 9.8 percent from 2,282 to 2,058. Foreclosure sales rose 2.4 percent from 1,063 to 1,089 during the same period.

During the first nine months of 2015, there were 6,212 filings and 3,297 sales. For the same period of 2014, there were 8,505 filings and 4,760 sales. Comparing year over year, filings fell 27 percent and sales fell 30.7 percent.

Below is a time series showing quarterly totals in foreclosure filings and sales. The large dip in sales shown during the second quarter of 2008 can be attributed to a change in the foreclosure time line that took effect on January 1, 2008 and led to a large temporary dip in the number of foreclosure sales during March, April, and May of that year.

There are not large seasonal changes in foreclosure activity in Colorado, although the third quarter tends to be the most active quarter for foreclosure sales in Colorado.

Statewide, there was approximately 1 completed foreclosure (foreclosure sale) per 1,897 households for the third quarter of 2015. The map shows that there are few hot spots for foreclosure left in Colorado, and those that remain, such as San Juan County, are very small markets where a single foreclosure can move foreclosure rates up quickly.

No metropolitan county was found among the top ten counties for foreclosure sales rates. Most of the counties in the top ten were mountain and rural counties including Delta, Las Animas, and Fremont counties.

Pueblo and Mesa counties reported the highest foreclosure rates of the metropolitan counties. Pueblo County reported a foreclosure rate of one foreclosure per 665 households while Mesa County reported a rate of 1 foreclosure per 654 households. See Table 3 for full listing.

Boulder County reported the lowest foreclosure rate among metropolitan counties with 1 completed foreclosure per 10,435 households.

For a detailed list of each county, see the full report:  

2015_3rdQ Foreclosure Report

Colorado Foreclosures Down 19 Percent During Second Quarter

Foreclosure totals in Colorado during the second quarter of 2015 remained well down from the 2009 peak totals. There were 2,282 foreclosure filings during the second quarter of this year, which was a drop of 19 percent from the second quarter of 2014. There were 1,063 foreclosure sales at auction during the second quarter of this year, dropping 34 percent from the second quarter of last year.

Back in 2009, filings had peaked at 12,135 during the second quarter, and sales peaked at 6,686 during the first quarter of 2010:

Foreclosures are on schedule to end the year way down from 2014. So far, this year, there have been 4,154 filings and 2,208 sales at auction, which means at mid-year, filings and sales are both down 33 percent from where they were at mid-year last year. 

For more, see the state of Colorado full report:

2015_2ndQ Foreclosure Report by Ryan McMaken

Year-End 2014 Foreclosure Report for Metro Counties in Colorado

Foreclosure stats for Colorado's metro counties up through the end of 2014:

Monthly Foreclosure Report Dec 2014 No Logo

Economist: Colorado foreclosure filings about as low as they can go

From the June 4 issue of The Denver Post: 

Colorado foreclosure filings may be as low as they can go without a major economic boom, Department of Housing economist Ryan McMaken said Wednesday. 

Foreclosure filings fell 24.7 percent to 3,441 in the first quarter, compared with 4,571 in the first quarter of 2013. The number of foreclosure sales dropped to 1,718, down 41.5 percent from 2,935 in the year-ago period. 

"We would need a really excellent economy to get the numbers to go a whole lot lower than where they are now," McMaken said. "The rates will continue to be low in 2014, as long as the economy doesn't worsen significantly." 

Although foreclosure activity was down year over year, filings and sales increased 15.4 percent in the first quarter, compared with the fourth quarter of 2013, with filings jumping 15.4 percent to 3,441 from 2,981, and sales climbing 4.1 percent to 1,718 from 1,650. 

McMaken said he doesn't expect filings to continue to climb and blamed the bump on rising interest rates and slowing increases in home values. 

Purchases and refinance deals pushed "release of deeds of trust activity through the roof in 2013," he said. "We also saw big home price increases in 2013. Then we saw that all start to moderate toward the end of the year. We saw interest rates start to head back up, and then we started to see — related no doubt — home prices start to moderate as well." 

In 2013, 15,333 foreclosures were filed and 9,318 properties were sold, the lowest totals since 2004.

9News, November 16

9News picked up our October foreclosures release.

9News invited me in to discuss the second quarter foreclosure stats for Colorado. The story is here.

AP: Colorado foreclosures fall 24 percent in May

The AP picked up my foreclosure story today. Carried at 9News:

Colorado foreclosures fall 24 percent in May

DENVER (AP) - Foreclosures in Colorado are continuing to fall.

According to the Colorado Division of Housing, they fell 24 percent in May compared to last year.

The department says May was the sixth consecutive month during which both filings and sales were down when compared to the same month a year earlier.

Division of Housing spokesman Ryan McMaken says lenders and servicers have been proceeding slowing the foreclosure process during the past seven or eight months and there are fewer foreclosures to report.

Late December foreclosure stats update

Here's a December 22nd foreclosure update for 9news.

Foreclosure-gate poised to do some major damage

The Market Oracle has a nice and detailed piece explaining the history of mortgage loan securitization and debt collection, and shows how the current crisis has the potential to inflict massive amounts of damage on the mortgage and banking industries.

Here's my favorite part:

Foreclosures can only be done by the note-holder, who has the legal standing to show up in court and ask the judge to foreclose and evict. In about half the states, they have to bring the ORIGINAL (not a photocopy or electronic version) document with "wet signature", so the judge can see the actual ink on paper. They have to prove the chain of title and that they own the note they intend to foreclose on.

BECAUSE IF THE CHAIN OF TITLE OF THE NOTE IS BROKEN, THEY WON'T BE ABLE TO FORECLOSE.

Once the people going into foreclosure figure this out, they will stop paying and hire lawyers. Some will keep their homes for free.

Once the people who have been paying their mortgages figure out they might not need to pay, they will stop paying.

Once the lawyers figure this out, they are going to be busy for the next five years helping people sue the banks.

Once the shareholders of the bank stocks figure this out, they will sell the shares.

Once the pension funds figure this out, they will also sue the banks and return their now junk MBS.

Once real estate buyers figure this out, they will stop buying anything with the potential for a tainted chain of title. The foreclosures will stop selling (many already have).

Even the sheriff is figuring this out. What happens when the sheriff refuses to do the foreclosure?

The moral of this story is: If you're buying a house, don't cheap out on your title insurance.

My prediction actually came true

It's a red letter day. One of my economic predictions actually came true. Note this snippet from the Denver Business Journal:

Foreclosure filings in Colorado's 12 largest counties fell 29.5 percent in July from a year earlier, although they were up slightly from June 2010, the Colorado Division of Housing reported Thursday.
Completed foreclosures in the state's urban areas, meanwhile, fell 15.4 percent in July from 2009 and were down 10.9 percent from June 2010.
The new figures appear to back up state experts' predictions earlier this year that Colorado foreclosure sales -- the last stage in the foreclosure process if a homeowner can't work out a deal with a lender -- would start to come down after months of year-over-year decline in foreclosure-filing rates.

Huzzah. My batting average is now about .100

Flat is the new 'up'

With the next several years looking quite grim, it seems that just neutral economic news will be good news.

From the Aurora Sentinel today:

Higher earners far from immune on foreclosure

AURORA | Not a single economic class or neighborhood in Aurora is immune to foreclosures.

Although foreclosures are more saturated in low-income neighborhoods, they are also dispersed throughout middle- and high-income neighborhoods, according to 2009 data from Arapahoe County.

Until recently, foreclosures were most prevalent in lower-income neighborhoods, among homeowners who were living paycheck to paycheck, afflicted with job losses and unable to pay their mortgages.

But as high unemployment persists and the aftermath of the recession continues to ripple across the state, wealthier neighborhoods with higher-income homeowners are becoming vulnerable to foreclosures as well.

Although the Arapahoe County Assessor’s office doesn’t track the incomes of people who have been affected by foreclosures, they do track the prices of homes that have been foreclosed upon.

Judging by those statistics, it’s evident that the rate of foreclosures has jumped from 2009 to 2010 in all levels of home prices — and, presumably in all economic classes.

*
“Every category did increase,” said Corbin Sakdol, Arapahoe County Assessor. “However, the heavy foreclosures are still in the $250,000 and below range.”

Since January, there were about 1,300 foreclosed homes in Arapahoe County in the price range of $250,000 and below, up from about 1,000 from January to June of 2009, Sakdol said.

In the price range of $250,000 to $500,000, there have been about 160 foreclosed homes since January, up from about 110 foreclosures in the same period of 2009.

The trend continues all the way up to the homes in the price range of $1 million and above. In that range, there have been 16 foreclosed homes since January, up from 11 in the same period of 2009.

Aurora still has the highest number of foreclosures out of any area in Arapahoe County, Sakdol said.

But data from the state of Colorado’s Division of Housing show that foreclosures are trending away from Aurora and into counties such as Jefferson, Douglas and Boulder.

“The fact that foreclosures have become more numerous in places like Douglas and Jefferson indicates that foreclosures are moving up the income scale,” said Ryan McMaken, community relations director for the state of Colorado’s Division of Housing. “We’re seeing movement in foreclosures toward areas that have more expensive homes, whereas they used to be centered in Denver, Adams, Arapahoe, and especially in Aurora.”

Foreclosures are quick to impact those people without college degrees, who most likely haven’t built coffers of savings to sustain them through a lull of unemployment, he said. That explains why the number of foreclosures were originally most concentrated in places like Adams County and Arapahoe County.

But since late 2008, as homeowners in high-income neighborhoods have slowly run out of money because of unemployment, they are now in the same position as those lower-income homeowners.

“The length of time that unemployment has been high is now starting to affect people with higher incomes because they are running out of savings,” McMaken said. “But people toward the lower end of the income scale are most impacted by the recession.”

Recent data suggests that the rate of people going into foreclosure statewide, including in Aurora, has reached a plateau.

McMaken said last month’s figures show the lowest foreclosure filings for counties since May 2009.

“Flat is the new ‘up’ in terms of good economic news,” he said. “Flat is what you like to see. Rather than foreclosures going up, if they can just stay flat for a while then you’re happy about that, and that seems to be what we’re looking at right now.”

My talk in Aspen

I was recently on an economics panel at the Aspen Board of Realtors' Economic Summit. The Aspen Daily news did a write-up.

Foreclosure filings up dramatically
by Catherine Lutz, Aspen Daily News Staff Writer
Monday, March 15, 2010

Expert: Locals in resort areas getting hit hard

Foreclosure filings in Pitkin County are more than triple what they were in early March last year, mirroring a disturbing trend in which experts are seeing rural resort regions getting hit harder later in the economic downturn.

There have been 22 foreclosure filings so far in Pitkin County in 2010, compared to six at the same time last year, according to treasurer’s office records.

Delinquent amounts range from under $100,000 to $1.5 million, and there doesn’t seem to be any rhyme or reason to the types of foreclosures being filed, said Tiffany Wancura, chief deputy public trustee for Pitkin County.

“They’re all over the place,” said Wancura. “They just keep coming in.”

A scan of the foreclosures list shows that mostly individuals and couples are affected, as opposed to LLCs, which tend to own commercial properties and oftentimes more expensive, second homes.

Pitkin County saw a total of 105 foreclosure filings in 2009, out of which 20 properties went all the way through to the foreclosure sale. It was the third highest number of foreclosures since 1973. (Records are unavailable before that.) By comparison, 2008 saw 35 foreclosure filings and five completed foreclosures in Pitkin County.

An economist who works for the state government addressed the issue of rising foreclosures recently at the Aspen Board of Realtors’ real estate summit.

Some resort regions saw 40-60 percent foreclosure rates two years ago, said Ryan McMaken, director of community relations for the Colorado Division of Housing. That’s when vacation home owners, initially hit by the economist crisis, were choosing to jettison their timeshares or other investment properties as values plummeted by simply not paying the mortgage. Owner occupants, meanwhile, qualified for a federal foreclosure deferment program, which saved many people from foreclosure sales.

But now, “local owners are losing their jobs or otherwise seeing a decline in income, so over time locals are impacted more and more,” said McMaken, an economist.

In the rural resort regions of Colorado, McMaken said, both new foreclosure filings and completed foreclosures are going up, and in some places are doubling and tripling since last year.

“It’s because places like this got hit later,” he said. “And it adds to the pain lasting.”

Statewide, data is not yet available for 2010. But trends from 2009 show that while foreclosure filings increased — there were 18 percent more in 2009 than in 2008 — foreclosure sales decreased by 4 percent.

These trends indicate that “lenders, borrowers and housing counselors are meeting success in implementing a variety of loss mitigation strategies,” according to a report from the state Department of Local Affairs. “However, the increase in new foreclosure filings indicates that foreclosure activity will continue in Colorado at least through the first half of 2010.”

The DOLA report also notes that “most of the new growth in foreclosure activity is taking place outside of the Denver Metro area.”

Foreclosure filings have risen across Colorado nearly every year since 2003, according to state data, with a big spike in 2007. Filings rose to 39,900 that year, from 28,400 in 2006. They went down just slightly in 2008, to 39,300, but rose again, to 46,400, in 2009.

Foreclosure sales have been decreasing since 2007, when there was a high of 25,000 completed foreclosures.

Both foreclosure filings and sales are roughly triple what they were in 2003.

The largest amount of foreclosure activity last year was taking place on the Front Range, even though some metro counties are seeing the biggest drops in foreclosure sales totals.

Mesa County (home to Grand Junction), on the other hand, saw about 300 percent more foreclosure filings and sales in the fourth quarter of 2009, compared to the same period in 2008 — likely due to the decrease in oil and gas activity. Otherwise, foreclosure rates (number of homes per completed foreclosure) have generally been lower in the mountains and on the Western Slope, according to DOLA.

Pitkin County’s foreclosure rate in 2009 was .3 percent, which translates to 393 households per completed foreclosure, among the lowest in the state. Garfield County had 408 foreclosure filings in 2009, and 82 foreclosure sales. That’s compared to 108 filings and 10 sales in 2008. Still, its 2009 foreclosure rate was .4 percent, compared to the state average of 1.1 percent.

Locally, it’s unknown how many of the foreclosure filings will translate into sales at auction. The first scheduled foreclosure sale of the 2010 filings in Pitkin County is May 12.

Meanwhile, banks that have been acquiring more and more property due to foreclosures are doing everything they can to avoid future foreclosure sales.

If a foreclosure sale goes through, there are additional costs to the bank, including legal fees, property taxes and the time spent by staff, said Scott Gordon, president of Alpine Bank Aspen.

“The bills add up pretty quick,” said Gordon.

Gordon also pointed out that property values have been low recently, and while the bank may prefer to hold the property for a couple years in hopes of better recouping costs when the market goes up, federal regulators want them to sell it sooner rather than later.

“We’re not in the business of buying and selling real estate; that’s not apart of our core business model,” he said.

Gordon said that it’s to everyone’s advantage to try to negotiate avoiding a foreclosure sale.

“Strategically the best thing you can do is to find what the borrower and the bank can work out,” he said. “If you have some level of income coming in, the last thing you want to do is not have a conversation with your bank.”

The latest Case-Shiller index data

In case you're looking for it, here's the link to the latest Case-Shiller home price index data.

October 8 9News Interview

Here's the story that accompanied my Thursday morning interview on 9News:

Foreclosures still on the increase, but trend is slowing

KUSA - The Colorado Division of Housing has released local foreclosure statistics for September, and while the numbers continue to rise, the Division says they are improved over a year ago.
Advertisement

The office said "completed foreclosures" rose by 21 percent in the state from last month, but the September numbers are down 5 percent from 2008.

According to the Office of the Comptroller of the Currency (OCC), which regulates all national banks, foreclosures are "completed" when the ownership of the properties is transferred to the servicers or investors and the debts are extinguished.

The OCC website says the process varies by state and can take up to 15 months to finish.

The numbers show Mesa County led the state in foreclosures with a rise of 217 percent over 2008, with Denver County reporting a decrease of 29 percent since this time last year. Arapahoe County totals fell 13 percent.

Housing spokesman Ryan McMaken was on 9NEWS 7 a.m.

McMaken explained completed foreclosures were lower because borrowers are becoming more sophisticated in exploring alternatives to foreclosure.

"This is helpful in keeping down the number of foreclosures that proceed to the end of the process," McMaken said. "Also, the reach of the foreclosure hotline continues to expand and this has helped keep totals down."

As to why completed foreclosures increased since August, McMaken says the division has noticed a slow but growing trend of lenders processing foreclosures more quickly.

Overall, McMaken says there's little in the report to suggest that foreclosures are about to take off again in Colorado, but the problem will persist for a while as the economy continues a gradual recovery.

"I'd expect to see a little bit of growth from September to October in totals," according to McMaken, "but I still expect 2009's numbers to be either flat or lower than the numbers from last year."

The full foreclosure report is available on the Division of Housing blog: www.divisionofhousing.blogspot.com

The new partnership with Rocky Mountain PBS

The hotline is now partnering with Rocky Mountain PBS to promote the Hotline. Check out their site "Facing the Mortgage Crisis"

Latest Colorado State of Mind appearance

I was on Colorado State of Mind on Friday night. The topic was foreclosures.

Interview on Channel 8 in Denver

Last April, I was part of a panel discussion on the housing market in the Denver area. It featured Zach Urban of the Division of Real Estate, Terry Ware of the City of Denver, and Tony Ormsby of the City of Aurora.

Here are some screen shots: