Thursday, February 22, 2007

"Massive Backlog" In Denver

The Rocky Mountain News reports from Colorado. "Hundreds of foreclosures in Denver are on hold because of a massive backlog in the Clerk and Recorder's Office, putting lenders in a 'precarious position' and forcing the city to hire more help. On Wednesday, 661 foreclosure packets, which are supposed to be recorded within 10 days, were more than two weeks past due, according to an internal report obtained by the Rocky Mountain News."

"The problem is so bad that employees are working weekends to catch up and fielding urgent pleas from law firms handling foreclosures. 'I'm desperate!' starts off one e-mail to the clerk and recorder. 'I have a (Department of Housing and Urban Development) title package that has to be sent out tomorrow.'"

"Interim Clerk and Recorder Stephanie O'Malley said she inherited the problem when she was appointed to the post Jan. 9 by Mayor John Hickenlooper. 'The only thing I could do was say, 'I need to get more people in here to help move this process along,' and that is what I've done,' she said."

"O'Malley, who is running for the seat in May, said there are two factors contributing to the backlog. First, foreclosures in Denver have tripled since 2002."

"The other factor delaying Denver foreclosures points to former Clerk and Recorder Wayne Vaden, who resigned in the wake of the disastrous Nov. 7 election. While in office, Vaden approved the purchase of a $143,500 software program that requires employees to manually transfer data from about 2,500 older but active foreclosures into the new system."

"'My staff has been held captive in having to migrate data physically from that old system to the new system and be attentive to new packets,' O'Malley said. 'It is a lot of work.'"

"Rhonda Stewart, a deputy public trustee, said it used to take 10 minutes to process a foreclosure. With the new software, it now takes about 30 minutes, she said."

"Metro-area law firms that handle foreclosures and do business with the city either declined to comment or did not return calls. But in e-mails obtained by the Rocky, it is clear the backlog has put them under pressure. 'I know HUD could refuse title if we don't get it to them,' states another e-mail."

"HUD requires that all documentation, including the original or certified copy of a deed, be submitted within 45 days of the request for deed recording."

"O'Malley said the backlog 'doesn't bode well for the community.' 'When you just have these properties sitting there dormant, from a community standpoint, that's not a good thing,' she said."

"The delay also hurts business. 'If you have a piece of property out there that's (on hold), the lender is put in precarious position because now they're sitting on a piece of property of which they're not getting any revenues,' O'Malley said. 'There's no payment on the mortgage,' she said. And so their goal, of course, is to move the property so that they can get a return on their investment."


At 11:55 AM, Blogger scott said...

Thank you for that blog about the cities backlog in Denver. I'm looking around to buy Colorado property and now I now that the city of Denver might not be the best place for my investments. Does anybody know of good sites for nationwide real estate purchases? I have been using and it has been very helpful.

At 2:20 PM, Blogger Loren said...

Try Pueblo or Trinidad, Montrose or Grand Junction. There's plenty of land out here. Colorado is very cyclical. It will most likely be cheaper 5 years from now nearly anywhere in the state.


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