The month of August came and went for most Colorado Springs homeowners, but some received bank default notices for the first time. Whether the rate of foreclosures on Colorado Springs real estate increases as it has in the State of Colorado or whether the foreclosures coming into play are balanced by other Colorado Springs home sales remains to be seen.
On September 15, 2011, the Denver Post cited a report from the Colorado Division of Housing. “Foreclosure filings hit a six-month high in August while foreclosure sales at auction reached a two-month high.” An economist from the Colorado Housing division says that some lenders are beginning to process foreclosures more quickly or we are seeing more delinquencies, which lead to foreclosures.
The rate of home foreclosures in the United States increased 33 percent between July and August 2011, according to the Colorado Springs Business Journal (09/15/11). Over 228,000 U.S. properties were affected in August. Csbj.com says that the increase is the highest since late 2010.
Tabulating a 51-percent increase, the number of Colorado foreclosure auctions ranked the state in the nation’s top 10. Even so, Colorado foreclosures are down more than 15 percent from a year ago.
Why the “sudden” increase in foreclosures? First of all, many large banks stopped all foreclosures after a large number of borrowers filed complaints and lawsuits because of flawed paperwork and procedures. Lenders have painstakingly gone back over all of these files. Government investigations into the mortgage lending industry and recent mediations may have freed up some of the foreclosure proceedings that have been held at bay.
In the meantime, as banks are catching up, the vast majority of defaulting homeowners have stayed in their homes, some for as long as two years. These borrowers may get out of their tough spot by refinancing, finding a buyer and arranging a short sale, or selling the home on the regular market. They need to do something quickly.
To avoid buying into a trap, buyers who are interested in investing in these REO or bank owned properties are advised to work with a professional real estate agent and legal expert who are experienced in the foreclosure market. Some foreclosures may have structural damage, building code violations, and other problematic issues.
Experts agree that the sooner the backlogged inventories of foreclosed homes are absorbed by the market, the more stable the Colorado real estate market will be.
Contact award-winning real estate agent Ann Heiring of RE/MAX Advantage, Inc. at (719) 440-1010 or Toll Free at (800) 246-8978 to learn how an experienced Colorado Springs Realtor® can help you achieve your lifetime goals. In appreciation for those who serve our nation, Ann offers special rebates for active and retired military.