Friday, November 20, 2009

DESPITE DOWN ECONOMY, COMPLETED FORECLOSURES FALL 8% IN COLORADO

Through the first three quarters of 2009, completed foreclosures in Colorado stood at 14,971, an 8% decline from last year's total of 16,265 during the same period. Colorado foreclosures are down almost 20% from their peak levels in 2006, despite large job losses and record unemployment.

While the news of a decline in completed foreclosures is positive, we obviously are still in a very tough economic situation. The first wave of foreclosures which pounded the state from 2004 - 2007 were driven by unregulated lending, overdevelopment of new construction and easy access to subprime financing.

Today, the primary culprit is job loss. Prime fixed-rate loans to borrowers with good credit now account for about one-third of all new foreclosures nationally, up from just 21% a year ago. Colorado's unemployment rate in October stood at 6.9%, while nationally the unemployment rate is 10.2%. Five states (Michigan, Nevada, Rhode Island, California and South Carolina) reported unemployment rates in excess of 12%.