Statewide mortgage payoffs lowest since 2000

Wed, Jan 25, 2012


The number of mortgage loans paid off, an indicator of real estate market health, fell 6.4 percent statewide from 2010 to 2011.

However, the number of loan payoffs rose from the third to fourth quarter.

“That’s good news after three consecutive quarters of declining release rates,” said Ryan McMaken, spokesman for the Colorado Division of Housing.

He said release numbers have been in line with home price indexes and that he wouldn’t be surprised to see home sales prices rise slightly in December reports.

The number of deed releases in 2011 was the lowest number of releases since 2000, McMaken said.

Deed releases typically happen when a mortgage is paid off through a home sale or refinancing.

Public trustees in Colorado released a total of 235,749 deed in 2011, down from 251,861 in 2010.

“The surprise really is that in spite of three years of declining interest rates, there hasn’t been activity,” McMaken said.

He said one explanation could be that most of the people who are eligible and qualified for refinancing probably did it in 2009 when rates first dropped. Of course, many people would not be qualified for refinancing today because real estate values have declined and they don’t have enough equity in their homes to get loans on the amount they owe.

There is also little activity in home sales as buyers aren’t motivated.

“It’s not like 2005 when everyone ran saying ‘if we don’t buy now, we’re going to be priced out because real estate always goes up,’” McMaken said. “We all thought that way.”

Now the reverse is true, and buyers aren’t rushing to get into the market.

The mountain communities are exceptions to the low deed release rates reported in the rest of the state, McMaken said. Those areas are still suffering, but there is more activity there than there is along the Front Range and in counties where home prices are the lowest like Weld and Pueblo counties.

McMaken said the trustees he spoke with in those mountain communities aren’t sure why there is more activity than there is in other parts of the state. It could be that there is more interest from national and international investors looking for bargains on mountain property. It could also be just that the mountain communities seem to be going through the foreclosure cycles later than the rest of Colorado.

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