Routt County’s foreclosure prognosis is mixed | SteamboatToday.com

Routt County’s foreclosure prognosis is mixed

County already has seen record number of filings in 2010, and trustee says tally may go higher

— With five weeks remaining in 2010, Routt County already has established a new record for the number of foreclosure filings in a calendar year at 274, and Public Trustee Jeanne Whiddon expects the year-end tally to reach 300.

"They're still coming in this week, and I don't see them slowing down," Whiddon said. "We've been averaging 25 to 35 a month."

The previous record was 234 set in 1985. That represented the peak of the fallout from the savings and loan crisis. By 1986, the number of county foreclosures had dropped modestly to 218 and was in full retreat in 1987 with 185.

Foreclosure filings, technically notices of election and demand (NEDs), are not the same thing as someone losing their home. A substantial number of NEDs are withdrawn before a property ever goes to a trustee's sale, and the property is either acquired by a third party or goes back to the lending institution that holds the deed on the property.

By the end of the third quarter Sept. 30, Whiddon said her office had seen 222 foreclosure notices filed and about 96 — or more than a third — had been withdrawn. However, some of those withdrawals were related to 2009 NEDs.

A withdrawal by the lending institution holding the deed signifies the mortgage payments have been brought current, or the terms of the mortgage have been restructured.

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Although the number of foreclosure filings that took place in 2010 doesn't augur well for 2011, Realtor Beth Bishop, of the Olson Team at Prudential Steamboat Realty, said there are more hopeful signs in the sales patterns of bank-owned homes.

"The good news is that our number of active residential foreclosures in Routt County is now 36 with 18 pending (under contract to be sold)," Bishop said. "And most of the pending sales are single-family homes. There's just one condo and one townhome."

The number of active listings for bank-owned homes has been as high as 51 this year.

The absorption of homes in foreclosure should be welcome news to homeowners here that either want or need to sell their property, Bishop added.

"We want to get through these foreclosures, and these houses aren't just sitting there like they are in some cities," Bishop said. "It's a good sign for our economy."

Sales particularly are active in Stagecoach, where an attractive five-bedroom home just less than 3,500 square feet sold for $423,000 this week.

Tracking the outcomes of NEDs is complicated by the fact that many take more than a calendar year to carry out and they continually are overlapping one another. And late in summer, the trustee's office put a new digital tracking system in place. That system still is catching up to the ongoing caseload.

Still, Whiddon said the ratio of foreclosed properties going to deed (final resolution) versus those being withdrawn is unsettling.

"In the past … I was seeing 75 to 80 percent being withdrawn and 15 to 25 percent going to the banks or a third-party buyer. Typically, withdrawal happens in the first two to six months. The trend is down in withdrawals and up in deeds. Many more people are just letting their houses go."

A new trend emerged just this week, Whiddon said.

"Two of three coming in is commercial, not residential," she said. "It's not huge numbers — it's a dozen, but we're seeing more (limited liability companies and limited liability partnerships)."

Looking into 2011, Bishop said the banks are under increasing pressure to renegotiate the terms of home mortgages to make it possible for homeowners to stay in their homes and remain current with their payments.

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