Saturday, February 17, 2007

Defaults Grow In Northeast Denver

The Rocky Mountain News reports from Colorado. "Foreclosures in Denver since 2003 will log a fivefold increase by the end of the year, a trend that is tearing apart neighborhoods throughout the city. A new city-funded report that tracked the swelling number of foreclosed homes found that once a neighborhood has several foreclosures, it quickly multiplies."

"Vacant and abandoned houses drive down surrounding property values, hurting schools that depend on property taxes and can attract transients and criminals. Neighborhood complaints about yards overgrown with weeds and filled with trash correlate exactly with areas plagued by foreclosures."

"Nowhere is the impact of foreclosures more evident than in northeast Denver. 'I would say on some blocks, but not every block, in Montbello, 25 percent of the homes are in foreclosure,' said -Realtor Phil Heter, who specializes in selling foreclosed homes. 'The same thing happened to Montbello in the '80s, with all of the HUD foreclosures."

"Heter has about 120 distressed properties to sell, double what he had a year ago. On one block in northeast Denver's Montbello, he has three homes he is selling for a lender, and other brokers are listing a few more across the street."

"In 2006, a record 19,425 real estate foreclosures were filed in the seven-county Denver area. That's up from about 9,000 in 2003."

"Realtors Carolin Sandberg and Sarah Hayes are in the process of selling a house in Green Valley Ranch in a short-sale. For this type of sale, the property doesn't go through the entire foreclosure process, even though the borrower is behind on mortgage payments. Instead, the lender accepts less than the amount of the loan."

"The loan is for about $170,000, but Sandberg and Hayes are listing it for about $165,000. The bank is paying the closing costs, legal fees and commissions, and the move to an apartment for the family."

"City Councilman Rick Garcia, who is co-chairman of the Foreclosure Task Force, said questionable loans are to blame. 'It does appear that the growing number of foreclosures, in part, are being driven by folks who got involved perhaps in riskier mortgage products than they understood,' Garcia said."


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