Foreclosures on record pace

   El Paso County's housing woes showed little sign of easing last month, as local foreclosures continued on a record pace.

   Foreclosure filings totaled 480 in April, bringing the year-to-date total to 1,696, according to a report Thursday by the El Paso County Public Trustee's Office.

   At that pace, said Trustee Tom Mowle, foreclosures could top 5,000 for the year, which would shatter last year's record of 3,556 filings, although the percentage of area households in foreclosure is smaller than in previous housing downturns.

   The nation's mortgage industry crisis has been cited by many experts as one of the major causes of rising foreclosures in the Springs and elsewhere. Many buyers bought homes using adjustable-rate, interest-only and other nontraditional loans.

   As interest rates increased on adjustable loans, or because of financial woes caused by a job loss, many homeowners couldn't afford mortgage payments fell into foreclosure.

   More than 800 El Paso County homeowners lost their properties last year in foreclosure. In addition to the human loss, neighborhoods potentially could suffer if too many foreclosed homes are resold by lenders at a discount, dragging down property values. Lower prices, however, could give some buyers a chance to get into a home.

   One bit of positive news in April's foreclosure report: The number of deeds released last month increased by about one-third over March's total, the Trustee's Office said. Releases are a positive sign because they signal a homeowner who has paid off a mortgage, refinanced a home or sold a property.

   In Colorado, a foreclosure filing is the first step in a process that can lead to the loss of a home, although not every foreclosure means a homeowner will lose their property and some catch up on their missed payments or work out deals with lenders.

   Homeowners aren't the only ones being affected.

   RDB Development, whose parent company is based in California, was set to build the Courtyards at Briargate office condominiums on nearly 10 acres northeast of Colorado Highway 83 and Research Parkway, on the Springs' far north side.

   After the site was prepared for construction, the developer's lender wanted 40 percent of the 15 condos presold before it would provide financing to build the units, said project manager Tom Davidson.

   Office condos - in which businesses buy space instead of leasing it - are popular in other cities buthaven't taken off in the Springs. RDB Development sold only one unit, Davidson said, and Wisconsin-based M&I Marshall & Ilsley Bank filed a foreclosure action in March seeking payment of nearly $6.6 million of a $7.1 million loan, according to Public Trustee's records.

   Davidson said RDB hopes that the lender will eventually withdraw the foreclosure. The company and a partner are discussing development of 2.1 acres with a 135-room, extended-stay hotel, and a buyer has shown interest in purchasing the rest of the property, Davidson said.

   "We still think it's a great site," he said.

   CONTACT THE WRITER: 636-0228 or rich.laden@gazette.com