Pamela Crowley (Florida)
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Denver area, slumpped for years, now declining?
http://www.greeleytrib.com/article/20060721/BUSINESS/107210096/-1/REALESTATE
Weld sees 1,086 foreclosures so far
Sharon Dunn
July 21, 2006
http://www.greeleytrib.com/article/20060721/BUSINESS/107210096/-1/REALESTATE
Weld sees 1,086 foreclosures so far
Sharon Dunn
July 21, 2006
Last fall, Weld County was coming off its worst foreclosure year ever.
It's getting worse, and those in the industry expect the number of foreclosures to continue to climb as a variety of factors converge in the next two to three years.
"I don't see this thing slowing down anytime soon," said Matt Revitte, a broker with Pro Realty Inc., who specializes in foreclosures. "We haven't seen anything this ugly in easily 15 years in the sheer anemic nature of this market."
As of this week, there were 1,086 foreclosures in Weld County, a 42 percent jump from the same time last year. In all, 2005 registered 1,500 foreclosures.
Though that's hardly as high as the volume of four of Colorado's other large counties, Weld's foreclosure rate, based on the number of residences, dwarfs the big boys on the block.
Looking at real-time numbers, there is one foreclosure for every 71 residences in Weld. In terms of severity, it's not quite the highest in the state. Adams County, with 2,450 foreclosures as of June 30, may hold the title with a foreclosure for every 50 homes. Arapahoe County tops the heap in volume with 2,570 foreclosures as of Thursday, but it comes out to one foreclosure per 77 residences.
Previous reports had Weld at top of the foreclosure rates, surpassing Adams, but those were based on residential numbers from the year 2000 and do not reflect the phenomenal growth the counties have seen in that time.
For the last year, the culprits to the problem have been the creative financing loans requiring no down payments, zero interest mortgages or adjustable rate mortgages. Weld may just be seeing the beginning of a foreclosure spike, as more ARM loans adjust to their higher rates in the next few years.
But the economy hasn't helped, either.
"There are a number of factors that are converging. It basically started with low interest rates and making more-risky-than-necessary loans, and people beginning to be squeezed by higher energy prices and not being able to sell their houses and walking away from their loans," said northern Colorado economist John Green.
Sara Allen, director of Consumer Credit Counseling Service of Northern Colorado and Southern Wyoming, said she's noticed another interesting trend in her offices where many residents on the brink of foreclosure visit.
The number of Weld residents seeking financial counseling in Larimer and Boulder counties has increased in the last year by 11 percent.
"What this told me is that these people work (there) and live in Weld County where home are less expensive," Allen said. "They're barely making it as gas prices go up."
Revitte said the Weld market is in a major correction at present. Home appreciation rates are flat and there's an oversupply on the market. At present, homes sit on the market for an average for 12 months before they sell.
It also doesn't help that the foreclosed homes are competing with homes that are on the regular market. Green agreed after looking at RealtyTrac.com's listings of homes owned by banks. The Web site states that at present, banks own 547 foreclosed properties in Weld and that there were 798 homes up for auction.
"The number of properties up for auction competes with those people trying to sell their homes and typically a home would go through auction cheaper than through a broker," Green said.
He added that such competition may keep sellers in limbo longer, making them walk way from loans they can't service. "It becomes a self-fulfilling prophecy."
Revitte agreed, adding, "This could be a house of cards that continues to implode."