Colorado foreclosures up 40 percent in 2007

Colorado foreclosure filings jumped 40 percent in 2007 compared with 2006, according to a report released Wednesday by the Colorado Division of Housing.

A total of 39,915 foreclosure filings were made in 2007, up from 28,509 in 2006, according to the state.

Meanwhile, foreclosure sales -- in which the property is sold to the lender or a third party -- rose 45 percent during 2007, to 25,320.

"As values drop and [homeowners] owe more money than they can sell their property for, it becomes much more difficult" to cure a foreclosure, said Kathi Williams, director of the Colorado Division of Housing.

The problem is most acute along the Front Range, where most mortgage loans originate, and where recent home construction has created a high inventory of newly built homes, Williams said. High-demand markets like Durango and Vail aren't suffering to the same extent, and foreclosures fell last year in nine counties that are experiencing an increase in oil shale development and mineral extraction activity, she said.

Statewide, there was one foreclosure for every 45 households, with the highest foreclosure rates found in the Denver area, Weld County and Pueblo County, officials said.

Tighter lending standards are reducing the number of buyers in the market, said Ron Woodcock, a real estate agent for Re/Max Southeast in Denver.

"Mortgage industry has tightened up unbelievably, which will fuel the fire," Woodcock said. "The buyers that are in the market right now are good buyers, but there are fewer of them."

Home prices continue to drop in the Denver area, Woodcock said. "But I'm licensed in Florida as well, and I can tell you it's worse there."

Colorado, which was considered by one private foreclosure marketing company to have the worst foreclosure rate in the nation for most of 2006, was surpassed by other states -- such as Nevada, California and Florida -- in 2007.