Denver - More than 12,000 metro-area foreclosures so far this year

[Joseph Burkeson, CMI]

More than 12,000 metro-area foreclosures so far this year

By John Rebchook, Rocky Mountain News
July 11, 2007

Forget the notion that metro-area real estate foreclosures are cooling off.
For the first half of the year, the seven-county Denver area logged more than 12,000 foreclosures, a 25 percent increase over the first six months of 2006.

And expect them to keep piling up for several more years.

"It is devastating to see the number of families going through this," said Zachary Urban, who heads the Colorado Foreclosure Hotline. He also serves as a director and counselor at the nonprofit Brothers Redevelopment in Edgewater.

"Just a couple of years ago, people were saying it was not that big of a problem and it was a lagging indicator, just a small bump in the economy, (that) the housing bubble is a myth. That turned out to be absolutely incorrect."

Public trustees in the Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas and Jefferson counties opened 12,074 foreclosures through June, compared with 9,665 in the first six months of 2006.

Adams County had 3,190 foreclosures in the first six months of the year, the most of any metro-area county. It also had the largest percentage increase from the same period in 2006 at 48.3 percent.

Adams County Public Trustee Carol Snyder said a combination of factors are driving the numbers.

"I think a lot more people are losing their jobs than the unemployment numbers would show," Snyder said. "Many people are working again but are not making as much as they were, so it is harder to make payments."

She also said adjustable-rate mortgages are making it more difficult for people to make payments. And there is still quite a bit of overbuilding in the growth counties.

Urban said the vast majority of people who lose their home during the foreclosure process want to buy again. The hotline, since it was created by the Colorado Division of Housing and other agencies last October, has answered more than 17,500 calls.

"I find the vast majority of them want to get back into homeownership as soon as possible," Urban said. "It is a dream that cannot be squelched."

He said he expects the crisis to continue "in the neighborhood of another two or three years," noting that it already has dragged on longer than many people originally thought it would.

In certain neighborhoods, the current foreclosure problem is worse than it was in the late 1980s, said real estate broker Beverly Meade.

"Some whole areas are being turned into ghost towns," she said.

The majority of the most severely hammered neighborhoods are those that are mostly poor and Hispanic, she said.

"People don’t like to talk about it because it sounds racist," Meade said. "A lot of people do not want to live in Mexican neighborhoods. It is absolutely racist. It makes me angry. It’s happening in small-home neighborhoods. It’s not happening to the McMansions."

She said she recently sold one foreclosed home in Aurora for $80,000. The home would have fetched $200,000 three years ago, Meade said.

Meade said she recently searched homes for sale in Denver priced at $105,000 or less and found 85.

"Three years ago, you wouldn’t have found one home under $105,000 in Denver," she said.

One problem is that many foreclosed homes are in terrible shape, Meade said.

She would like to see federal legislation requiring banks, the Department of Housing and Urban Development and other agencies to sell their foreclosures with "minimum standards," so buyers wouldn’t need to spend thousands of dollars to make them livable.


"What’s happening now is that the only people who can buy these houses in resale are investors," Meade said. "We are creating rental neighborhoods and slumlords."

Earlier this week, Denver’s Foreclosure Task Force made recommendations to ease the trend.

"People should always remember that foreclosures impact an entire community," Denver City Council President Michael Hancock said today.

"If the home next to you enters the foreclosure process and has a short sale, it hurts your resale value. If a home is sitting vacant and is in disrepair, it hurts everybody around them."

The task force’s recommendations include programs that help people understand loans. Other ideas include requiring more warning that an enforcement action will be taken and strengthening laws on predatory lending.

[Dale Duffy]

Originally Posted by jburkeson1

More than 12,000 metro-area foreclosures


Public trustees in the Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas and Jefferson counties opened 12,074 foreclosures through June, compared with 9,665 in the first six months of 2006.


"Three years ago, you wouldn’t have found one home under $105,000 in Denver," she said.

One problem is that many foreclosed homes are in terrible shape, Meade said.

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