One in 10 at risk of foreclosure; Springs' situation may be worsening

One in 10 American households with a mortgage is at risk of losing its home, and the foreclosure crisis could worsen if jobs remain scarce. The situation may already be worsening in the Colorado Springs area.

About 9.9 percent of homeowners had missed at least one mortgage payment as of June 30, the Mortgage Bankers Association said Thursday. That number, adjusted for seasonal factors, was barely down from a record high of more than 10 percent as of April 30.

More than 2.3 million homes have been repossessed by lenders since the recession began in December 2007, according to foreclosure listing service RealtyTrac. Economists expect the number of foreclosures to grow well into next year.

In Colorado Springs and El Paso County, foreclosure filings in July fell 33.4 percent when compared with the same month a year earlier, according to the El Paso Public Trustee’s Office. Filings through the first seven months of the year fell 13.6 percent from the same period in 2009.

But even as foreclosure filings have slowed, they might be picking up again, said Public Trustee Tom Mowle. Filings are on pace to total about 400 in August, which would be the first time they’ve hit that mark since April. Also, filings for the year are on pace to exceed 4,000; that would fall short of last year’s record of 5,470, yet still would be one of the county’s highest annual totals over the last 30 years.

“Things are better than they were a year ago, but they’re not good,” Mowle said of foreclosure activity.

Meanwhile, foreclosure filings in the state’s metropolitan counties fell 29.5 percent in July compared with the same month last year, according to a report Thursday by the Colorado Division of Housing. It was the fourth straight year-over-year decline in new filings.

While the pace of foreclosure activity has improved in Colorado, “the trend in filings could change at any time in response to the overall strength of the economy,” said Housing Division spokesman Ryan McMaken.

The number of Americans who are missing payments and falling into foreclosure has followed the upward trend in unemployment. The Labor Department on Thursday said requests for unemployment benefits fell sharply last week — the first decline in a month — but unemployment claims remain much higher than they would be in a healthy economy. The  jobless rate remains near double digits.

“Only when we see a consistent increase in employment will we see an increase in sales and starts, and a sustained improvement in the delinquency numbers,” Jay Brinkmann, the Mortgage Bankers Association’s top economist, said in a statement.

The housing market is struggling even as mortgage rates fell to the lowest level in decades for the ninth time in 10 weeks. Mortgage buyer Freddie Mac said the average rate for a 30-year fixed loan fell to 4.36 percent this week.
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Alan Zibel and Christopher S. Rugaber of The Associated Press contributed to this story.

‘UNDERWATER’ MORTGAGES
Real estate data provider CoreLogic says the number of U.S. homes with mortgages that exceed what the property is worth declined slightly in the second quarter versus the first three months of this year.

The firm said Thursday there were 11 million homes with so-called “underwater” mortgages at the end of June. That’s down from 11.2 million at the end of March. In Colorado Springs, 29,556 of all residential properties with a mortgage were in negative equity at the end of the second quarter, down from 30,032 in the first quarter and down from 55,247 during the second quarter of 2009.

CoreLogic attributed the overall decline primarily to homes being repossessed by lenders.