Friday, March 14, 2008

FORECLOSURES: TOP FIVE, OR NUMBER 24?

Interesting article in the Rocky Mountain News this week in the paper's Real Estate Blog.

According the Mortgage Bankers Association, Colorado ranked #24 in the nation in foreclosures during the fourth quarter of 2007.

Realty Trac, a California-based company which compiles and sells foreclosure lists to prospective investors, ranked Colorado #5.

Why the disparity?

There are several reasons, but the MBA methodology ranks foreclosures in terms of the percentage of home loans that are delinquent, while Realty Trac simply reports on the number of foreclosures divided by households (whether they have mortgages or not). Also, because of the way foreclosures are reported in Colorado, Realty Trac often "double reports" foreclosures as they reach the sale date and again as they are finalized.

The numbers do reveal that Colorado homeowners are not as "equity rich" as homeowners in other states (no surprise, given that our market has been flat or down for over five years), but loans in Colorado are outperforming loans in 23 other states, according to MBA.

Bottom line: Are things as bad here as has been reported?

"Certainly, we do have a foreclosure problem," said Chris Holbert, president of the Colorado Mortgage Lenders Association. "But in relation to other states, we are mid-range, not No. 1 or No. 5."