According to a report released Feb. 12th by the Colorado Division of Housing, the number of Foreclosures in Colorado was down 18.9% from the number in 2011. That is about where we were 6 years ago. There were 15,903 reported foreclosure auction sales of properties in 2012 compared to 19,617 in 2011.
There were also a reduced number of new foreclosure filings in 2012, down from 31,975 in 2011 to 28,579 in 2012. New foreclosure filings in Colorado represent how many times a Notice of Election and Demand (NED) was filed with the county Public Trustee by the attorney representing the lender on a defaulted loan.
The NED is the official beginning of the foreclosure process in Colorado, and establishes a sale date for the property to be sold at public auction. Typically there is about a 110 to 120 day period of time between the filing of the NED and the public auction date. During that time the homeowner can either cure the loan or work with the lender, housing counselors, and a short sale realtor to try to work out a loan modification, short sale, or some other method to avoid the foreclosure of their property.
The sale date can be postponed multiple times for up to a year from the initial public sale date at the lender’s discretion, but most lenders will not postpone without a very good reason. An application for a loan modification or short sale is the most common reason that might cause a lender to consider postponement. It cannot be last minute however. Typically a lender will require that all required documentation for a short sale or modification be in their system 30 – 45 days prior to the original sale date to consider postponement.
The reduction in new foreclosure filings and completed foreclosure auction sales in Colorado is definitely good news for Colorado homeowners. However, there has been some speculation about a possible new mini-wave of foreclosures coming in 2013 as a result of the 10 major banks holding back foreclosures on many properties until the recent settlement between the “mega-banks”, the Federal Reserve, and the Office of the Comptroller of Currency (OCC). It remains to be seen how our state will actually be affected by this new release of foreclosure proceedings.