Denver Real Estate Blog

Foreclosures up 41.5 percent in Denver area in 2007 in comparison to the 18,610 foreclosures reported in 2006.

The final tally of foreclosure filings in the seven-county Denver area in 2007 represent a 41.5 percent increase over the record filings in 2006.
Last year’s 26,326 filings were the equivalent of every home in Littleton and Louisville going into foreclosure.

According to sources tracking foreclosures in Denver MLS. 6 percent of homes for sale where bank owned or those sold through HUD, Department of Housing and Urban Development. 13 percent of properties sold were foreclosure related. It is believed now that that number has increased to 26 percent.

The root case of this market phenomenon was created by the fact for years Colorado has not required lenders to be licensed and regulated. As a direct result we have seen a lack of responsibility and bad business practices on the part of the lending industry. Combined with a lack of financial experience and some highly motivated individuals with performance based commission income, “greed”, the best interest of the borrower was ignored.

Anytime your dealing with finances you really need to seek the additional advice of trained professionals such as a Certified Financial Planner, Stockbroker or C.P.A. Suggesting a particular loan program to someone needs to be done with a lot more care and due diligence, taking into account the persons entire financial picture on the part of the mortgage lender. Many changes in the industry will ultimately become a result out of the number of foreclosures being reported.

Many foreclosures are caused by the fact that many buyers where placed in an adjustable rate program using the entry rate as the means for qualifying a persons debt to income ratio. Then when adjustments are made as everyone knew would occur in accordance to the way the loan is outlined, a person finds themselves in a situation that they can no longer afford the payment.

Unfortunately consumers shop for a loan by rate only. That how the product of home loans are marketed. They need to look at what the loan that is being suggested by a mortgage lender actually costs, the pros and the cons. As a result a lot of people got into mortgages they really could not afford.

Another issue that some believe has hurt Realtors marketing homes is some lenders will not allow the listing agent to put the home in the MLS as a lender-owned.

A new state law went into effect on January 1, 2008, which gives people who are losing their homes an extra 75 days upfront to work out a deal with their lender. In the past, the high bidder for the foreclosed home - typically the lender - couldn’t take title of the home until 75 days after the foreclosure auction by the public trustee. During that time, the borrower could cure the mortgage by paying off the entire loan and any other costs associated with the foreclosure, a fairly rare occurrence.

“The best thing about the process is that it gives our counselors at Colorado Foreclosure Hot line (1-877-HOPE) more time to help people, whether it is a short-sale, a regular sale, or a deed in lieu of foreclosure,” said Ryan W. McMaken, of the Colorado Division of Housing.

“The new time line probably will not change the number of filings, but it may slow down the number of homes that end up being sold in a foreclosure,” he added. Since the hot line was started in October 2006, more than 26,000 people have called.

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Jeffery McClintock, is a real estate broker in Denver and prides himself on providing clients with professional guidance in all phases of residential new construction, including market research, product development, consulting, marketing and advertising. His personal mission is to bring to you a level of knowledge, experience, commitment, high standards and results to answer your real estate needs. He believes, the most effective way to provide superior service is to build a strong working relationship with you. His system includes regular consultations and feedback, which is the best tool for identifying and clarifying your real estate objectives and help define strategic solutions.