Foreclosure Starts Rise 36 Percent from July, Up 160 Percent From year Ago;
Spike Likely Fallout From State Attorney General Lawsuit Against Two Foreclosure Firms
IRVINE, Calif. – Sept. 11, 2014 – RealtyTrac® (www.realtytrac.com), the leading online marketplace for real estate data, today released an August 2014 Colorado Foreclosure Market Report™ which shows a total of 1,478 Colorado properties with a foreclosure filing in August, up 23 percent from July 2014 and up 57 percent from a year ago — the biggest annual increase in Colorado foreclosure activity since April 2007.
One in every 1,496 housing units in Colorado received a foreclosure filing during the month, the nation’s 20th highest state foreclosure rate and still below the national average. One in every 1,304 housing units in the Denver metro area received a foreclosure filing, the highest rate of any metro in the state. The Colorado Springs metro area followed with one in every 1,322 housing units receiving a foreclosure filing.
Rise in foreclosure filings due to spike in foreclosure starts
In August, Colorado reported 1,273 scheduled foreclosure auctions, the start of the foreclosure process in the state, a 36 percent increase from July and a 160 percent increase from August 2013. The Denver metro area led the increase with 749 foreclosure starts in August, a 54 percent increase from July and 307 percent increase from a year ago. The Colorado Springs metro area reported 159 foreclosure starts, a 12 percent increase from July 2014 and a 133 percent increase from a year ago.
“The swell in foreclosure filings is likely fallout from pending litigation between the Colorado Attorney General and two of the biggest foreclosure law firms in the state,” said Daren Blomquist, vice president at RealtyTrac. “The litigation has led to transfers of many foreclosure cases to new law firms, who in many cases are re-filing the cases from scratch.
“Foreclosure activity has been artificially low in Colorado since the spring of 2013, when the state attorney general first started issuing subpoenas investigating the two foreclosure law firms,” Blomquist noted. “In the 12 months ending in February 2013, Colorado averaged more than 3,200 foreclosure filings a month. Since then the average has been about 1,300 foreclosure filings a month, but the August numbers indicate there are some deferred cases finally hitting the foreclosure pipeline.”
“The surge in foreclosure activity is not the result of a faltering economy but instead problems in the foreclosure industry that have delayed some foreclosures,” said Chad Ochsner, owner/broker at RE/MAX Alliance, covering the Denver market. “The good news for buyers is that this increase in foreclosure starts should provide more affordable inventory of homes for sale in the coming months.”
“The influx of distressed inventory will not threaten to derail the recovery given the very tight supply in the market now but will be quickly absorbed by homebuyers and investors,” added Ochsner.
Completed foreclosures continue to fall across the state
205 completed foreclosures (REOs) were reported in August in Colorado, down 23 percent from the previous month and 55 percent from a year ago. The Denver metro area reported 78 foreclosure completions, a 7 percent decrease from the previous month and a 61 percent decrease from August 2013. The Colorado Springs metro area posted 42 foreclosure completions, a 49 percent decrease from July and a 36 percent decrease from a year ago.
“The decline in completed foreclosures paints a clearer picture of the strong housing market in Colorado,” continued Ochsner. “There aren’t that many distressed properties that are for sale currently and they are being snapped up quickly.”
The RealtyTrac U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing entered into the RealtyTrac database during the month — broken out by type of filing. Some foreclosure filings entered into the database during the month may have been recorded in previous months. Data is collected from more than 2,200 counties nationwide, and those counties account for more than 90 percent of the U.S. population. RealtyTrac’s report incorporates documents filed in all three phases of foreclosure: Default — Notice of Default (NOD) and Lis Pendens (LIS); Auction — Notice of Trustee’s Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). The report does not count a property again if it receives the same type of foreclosure filing multiple times within the estimated foreclosure timeframe for the state where the property is located.
The RealtyTrac U.S. Foreclosure Market Report is the result of a proprietary evaluation of information compiled by RealtyTrac; the report and any of the information in whole or in part can only be quoted, copied, published, re-published, distributed and/or re-distributed or used in any manner if the user specifically references RealtyTrac as the source for said report and/or any of the information set forth within the report.
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