It’s projected by the end of 2012 there will be more than 2,300,000 foreclosures and 700,000 home repossessions in the U.S. These numbers will rise significantly due to Hurricane Sandy.
In the northeast, tens of thousands of homes were destroyed or partially destroyed by Hurricane Sandy. Many homeowners will have their insurance coverage rejected by their private insurer. Flood claims paid by the National Flood Insurance Program will exceed $10 billion exhausting their $4 billion in payment authority. Homeowners who were forced to move elsewhere stopped making their mortgage payments. Hundreds of businesses were temporarily or permanently closed, leaving homeowners without jobs to make mortgage payments. Homeowners who were already facing foreclosure are more likely to walk away. Homeowners who are underwater in their mortgages will go into foreclosure because they can’t afford the high insurance deductibles.
New Jersey already had a horrific increase of 424% in foreclosure starts in September 2012 where the average time to complete a foreclosure is 1,072 days. Those numbers are expected to soar the last quarter of this year.
You may wonder what Hurricane Sandy has to do with nationwide housing, and in particular, Colorado. The answer is simple – the lenders (banks) will most likely tighten down even further in their lending to new homeowners. They are also talking about enacting new procedures in appraising property making it tougher to buy homes.
The last quarter of 2012 may prove to be much worse than anyone could have predicted. One to three years from now, those areas hit by Sandy may rebound with construction of new homes and rebuilding.
Colorado is a non-judicial foreclosure state. The non-judicial foreclosure process means the right to foreclose and sell the property actually lies with a third party, known as the trustee. The trustee has a fiduciary responsibility to both the lender and the homeowner (borrower). Colorado has had a 21% decrease in foreclosure filings the first three quarters of this year. Unfortunately, Colorado is still one of the top 10 states in foreclosure rates having 1 house in every 216 in foreclosure.
Several states rewrote legislation this past year extending the foreclosure process. One of these states included Nevada (also a non-judicial foreclosure state) where the average time to complete a foreclosure shot up 42% to 520 days. Surprisingly, the non-judicial state having the highest increase of foreclosures in the third quarter was Washington State where they had a 70% increase.
In Colorado, once the Public Trustee records a Notice of Election and Demand (“NED”), the average time to schedule a public auction of a home is 135-145 days.
The housing market is still not stable especially in Florida, Illinois, Ohio, New Jersey and New York. These states saw a substantial increase in foreclosure filings or foreclosure starts even before Hurricane Sandy hit.
Colorado is fairing somewhat better than most states due to a decreased amount of homes on the market setting the demand higher and more homeowners are fighting foreclosure in order to keep their homes.
If you are facing foreclosure, contact a foreclosure defense attorney. Colorado laws are complex and unique and it’s in your best interest to have an expert defense attorney representing you against the lender.
Keith A. Gantenbein, Jr. is a Colorado foreclosure defense attorney located in Denver and servicing all of Colorado. He also handles bankruptcies, mortgage negotiations, lender liability, real estate, civil litigation, contracts and landlord/tenant. If you think you will be facing foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure, contact Keith Gantenbein at (303) 618-2122 for a one-hour consultation where he will discuss your situation and go over all your options with you.