Denver Foreclosures

Tags: colorado, Foreclosures, HUD, mortgage
Posted in Foreclosures, May 5th, 2008 |

Foreclosures increased in Denver seven county metropolitan regions during the first quarter of 2008 but the rate is half of that noted during the same period in 2007. This year there were 7,459 foreclosure postings – 16% increase from the 6,410 listings during 2007. There is no respite in the pace – foreclosures are still rising, said Zachary Urban of Brothers Redevelopment. It has not peaked as yet and remains a hot issue.

Comparing foreclosures in 2006 (first quarter) with that of 2007 it is seen that the increase has been more than 30% in Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas and Jefferson Counties. The annual rate of increase during the first quarter of 2008 was thus halved. It brings cheers to some that the trend is going in a reverse direction. The expectation is that it will continue to do so during the forthcoming months. At the end of the month the total number of foreclosures might actually decrease.

In contrast to Denver and Colorado other states are showing jumbo increases. But Dan Bloomquist in the brokerage business since the last 40 years does not share this optimism. He thinks that the crisis will go on for another two years till 20010. The worst years will be 2008 and 2009 and maybe also 2010. The sun will start peeping from 2011 or the latest from 2012. Dan says that there is a bright side – this is the time to pick up a real bargain. Houses are being sold for $80 to $90 per square foot, whereas previously it was $150.

Analysis points to lending disparities. A good percentage of Latinos and Afro-Americans were peddled risky sub-prime mortgages in comparison to the Whites. This has raised eyebrows regarding discrimination and predatory lending in Colorado. A grant of $300,000 from HUD was sanctioned to the Colorado Division of Civil Rights to research this matter. It was found that while one out of five Whites contracted sub-prime mortgages, one out of every 2.3 Afro-Americans were trapped into these risky agreements.

Originally the idea of implementing the dream of every American owning a house was laudable but greed and ignorance mired the scheme. The prime loans were available only to those with good credit history and income proof. As such a sizeable chunk of the population was left out. The sub-prime mortgage became a tool for making quick profits and duping those who could not understand the implications.