Fewer properties in the Pikes Peak region are falling into foreclosure and being taken over by lenders and investors, a trend that mirrors most of the rest of the state, according to a Colorado Division of Housing report released Thursday.
Credit a turnaround in the housing market for the improving foreclosure situation, said Ryan McMaken, a Housing Division economist.
Low mortgage rates are driving a demand for homebuying, which is pushing up prices. That increase in values means it's less likely homeowners will find themselves owing more on a mortgage than their property is worth; as a result, homeowners can sell a house faster and more easily if they fall into financial trouble - staving off a foreclosure, McMaken said.
Likewise, an improving housing market and lower mortgage rates mean homeowners can refinance their loan and lower their mortgage payment if they lose a job or encounter other financial woes, he said.
"In a declining market, where the prices are going down, it's harder to get out of trouble and so you're more likely to end up foreclosing," McMaken said. Now, with housing on the rise, the opposite is true, he said.
The turnaround in the foreclosure situation should continue through the year, barring a spike in mortgage rates or a surge in unemployment, McMaken added.
According to the Housing Division's report:
- El Paso County, which includes Colorado Springs, saw its foreclosure filings fall 36.2 percent in the first quarter of this year when compared with the same period in 2012. Filings are the start of the foreclosure process and can lead to the loss of a home or other property.
First-quarter foreclosure sales in El Paso County dropped 5.9 percent from the same period last year. In Colorado, residential properties are sold at a public trustee's auction three to four months after a filing if owners can't resolve their financial troubles. Most properties are purchased by banks that had made the loan; other properties are bought by investors who typically fix up properties and either sell or rent them.
- In Teller County west of the Springs, which includes Woodland Park, foreclosure filings declined 61 percent in the first quarter from the same time last year, while year-over-year sales were down 51.4 percent.
- Statewide, foreclosure filings dropped 41.3 percent in the first quarter and sales declined 30.5 percent. The number of filings and sales in the first quarter were the lowest for any quarter since the Housing Division began to track quarterly activity in 2007.
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