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Trustee report: Lower foreclosure numbers not all good news

Fri, Jul 1, 2011

News

Foreclosure starts are the lowest they’ve been since November of 2007, though the housing market isn’t like to make major improvements any time soon, according to El Paso County Public Trustee Tom Mowle’s monthly report.

The trustee’s office started 242 foreclosures in June. In the first half of the year, the office started 1,743 foreclosures. That’s a bit ahead of the pace in 2007, when the county saw 3550 foreclosures started for the whole year. But the trend in 2007 was generally increasing through the year and in 2011 it is decreasing.

Mowle reported that the delay is likely the result of new regulations and processes for lenders filing foreclosures, which has likely delayed some foreclosure starts that would be happening in the spring to the late summer and fall.

“ I think there will be a modest upward trend in foreclosure starts” in the second half of the year, Mowle writes in his report. “While the lenders’ review process has gone on longer than expected, at some point a new normal will be established and the new filings will gradually be released.”

Mowle also noted that the final sets of interest-only loans will begin maturing this year.

One measure of the health of the local housing market is the trend in releases of deeds, which occur when borrows pay off their homes, sell them or refinance them.

“Private-party sales are hindered by competition with bank-owned property and tighter lending standards,” Mowle writes, “along with declining property values. Thus we will not see a big increase in private party sales, and thus in releases, until either the foreclosure inventory is cleared or other factors encourage home-buying.”

His office is likely to fall short of its expectation of 35,000 releases this year with just 16,621 so far this year and 2,113 in June. The year-to-date total for the year is higher than it was in 2010, but last year saw a steady increase from August through December, which is not common, according to Mowle’s report.

“Last year’s final total was itself the lowest in 10 years,” Mowle writes.

The highest rates of foreclosures are in 80916 (Gateway), 80817 (Fountain), 80133 (Palmer Lake), 80831 (Peyton/Falcon), 80808 (Calhan/Ellicott), and 80910 (Pikes Peak Park). These same six zip codes topped the list for 2010, though in a different, according to Mowl’s report.

Foreclosure starts county-wide are down about 28 percent.

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