Foreclosure activity took a significant upward turn in the historically foreclosure-slow state of Colorado in August, according to RealtyTrac's monthly U.S. Foreclosure Report for August 2014 released September 11.
In August, 1,478 housing units in Colorado were in some state of foreclosure, representing a 23 percent hike from July and a 57 percent leap from August 2013. One in every 1,496 properties in Colorado were in some stage of foreclosure in August 2014, which ranked the state 20th in the nation. Colorado's foreclosure rate was still below the national average of one in every 1,126 housing units, RealtyTrac reported.
Scheduled foreclosure auctions, which are the start of the process in Colorado, fueled the large increase in the state. There were 1,273 auctions scheduled in August, up 36 percent from July and 160 percent from August 2013, according to RealtyTrac.
"The swell in foreclosure filings is likely fallout from pending litigation between the Colorado Attorney General and two of the biggest foreclosure law firms in the state," said Daren Blomquist, vice president at RealtyTrac. "The litigation has led to transfers of many foreclosure cases to new law firms, who in many cases are re-filing the cases from scratch."
Foreclosure starts experienced an unusually high upturn in the Denver metro area, where the total of 749 for August was an increase of 54 percent from July and a whopping 307 percent jump from August 2013, RealtyTrac reported. In Denver, RealtyTrac reported that one in every 1,304 housing units had some type of foreclosure activity in August, which is slightly below the national average but higher than Colorado's state average.
"The surge in foreclosure activity is not the result of a faltering economy but instead problems in the foreclosure industry that have delayed some foreclosures,” said Chad Ochsner, owner/broker at RE/MAX Alliance, covering the Denver metro area. "The good news for buyers is that this increase in foreclosure starts should provide more affordable inventory of homes for sale in the coming months."
The one stage of foreclosure that saw a decline in activity was REOs (completed foreclosures), where 205 were reported in Colorado for August, RealtyTrac reported. That number was a decline of 23 percent from July and 55 percent year-over-year. The Denver area reported 78 foreclosure completions for August, a drop of 7 percent from July and 61 percent year-over-year.
"The decline in completed foreclosures paints a clearer picture of the strong housing market in Colorado," Ochsner said. "There aren't that many distressed properties that are for sale currently and they are being snapped up quickly."