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Trustee report: Foreclosure ‘cures’, private party sales down

Tue, Oct 4, 2011

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Fewer homeowners struggling with foreclosure have been able to “cure” their defaults in recent months than during the same time last year or even earlier this year.

El Paso County Public Trustee, Thomas Mowle, issued his end-of-month report for September, which revealed that new foreclosure starts were up in August and September to the second and third highest months of the year respectively. There were 334 foreclosures in August and 300 in September.

“Both are still lower than any month since November 2008,” Mowle wrote in his report. “ The trend still points toward a year-end total of about 3,800, by far the lowest annual total since 2007 and about 20 percent less than last year.”

He also said that homeowners who qualify for the 90-day Colorado deferment program and who bring their loans current with the trustee’s office have fallen off in recent months.

“At the same time,” Mowle writes, “the number of properties taken to sale by the lender at the first opportunity has jumped from about 23 percent among foreclosures started between June 2010 and February 2011 to 28 percent among foreclosures started since then.”

Mowle writes that the trend could be the result of federal officials insisting that lenders stop “double-tracking” defaulted loans by moving forward with the foreclosure process, while simultaneously negotiating with the borrower to find a solution. That means most lenders will have already done everything they could with borrowers before they’re in foreclosure.

Deed releases, which occur when a home is sold or a loan is refinanced or paid off, were up slightly in August and September, though they are still expected to be fewer this year than they were last year, which was the slowest year since 2001.

“One might have expected that the very low current interest rates might have sparked an increase in refinancing,” Mowle writes, “but you can’t refinance unless you have equity in the property. Either less refinancing is occurring than we would expect, or any increase in refinancing has been offset by even lower rates of private-party home sales.”

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