We find ourselves in the middle of one of the greatest wealth transfer periods of all time. Those with wealth must decide whether they want to make transfers, and if they do, they must decide how much, to whom, when and in what structure?
Foreclosure rates were down in both Larimer and Weld counties year-over-year in August, a fact that provides a glimmer of hope for area bankers.
Sponsor Generated Content
In the Fort Collins-Loveland metropolitan statistical area, the foreclosure rate fell from 1.19 percent in August 2010 to 1.05 percent in August, according to the most recent information issued by CoreLogic. In Greeley, foreclosures decreased more dramatically, from 2.23 percent in August 2010 to 1.86 percent.
Delinquency rates are also down, a statistic that Colorado Bankers Association senior vice president Jenifer Waller says shows signs of recovery. Thirty-day delinquency rates are at a three-year low for the state, and 90-day delinquencies are down year-over-year from 4.67 percent to 4.14 percent in August for Colorado.
In Fort Collins-Loveland, 90-day delinquencies are down to 2.58 percent from 3.13 percent year-over-year in August, and down to 4.99 percent from 6.04 percent in the same period last year in Greeley.
Part of the reason for the decrease may be tied to the foreclosure suspension that followed the federal investigation into “robo-signing” practices by some lending agents nationwide, Waller said. Colorado was not one of the states heavily involved, according to Waller, but some foreclosures were halted when it was discovered that loan servicers were signing documents without reading them first.
Some of those halted foreclosures could make an appearance in later quarters, Waller said, causing a bump in the foreclosure rate statewide. The exact numbers associated with the suspension and investigation were not available.
The robo-signing issue does not account for the entire decrease, according to Waller. Some of the good news can be attributed to improvement in the markets.
In the Greeley MSA, foreclosure rates have seen a steady decline since December 2009, when the percentage of foreclosures was 2.47 percent.
Patty Gates, vice president of business development for FMS Bank, a Greeley branch of Fort Morgan-based Fort Morgan State Bank, said that the decline reflects the fact that Greeley saw more foreclosures sooner in the recession than other Colorado cities.
“We had a higher level of foreclosures early on,” Gates said of Weld County. “Now things have started to level off, but there are still banks working through portfolios of bank-owned properties. That being said, we’ve seen the worst of it.”
Gates expects the trend to continue as the area slowly climbs out of the recession, and the fact that banks are making use of stricter underwriting standards that will help keep the foreclosure rate down in the future.
Also working against future foreclosures are the near-historic interest rates available on mortgages of all types. According to the Oct. 27 primary mortgage market survey conducted by Freddie Mac, the average rate for a 30-year, fixed-rate mortgage in the west region was 4.06, the lowest rate of any region in the country for the nation’s most popular mortgage.
Low interest rates give consumers the opportunity to refinance and save money on their mortgages if they are having difficulty making their payments.
“Property values are stabilizing, and consumers are more aware and making better choices, but only time will tell if things are really getting better,” Gates said. “(Still), a decrease in foreclosures is good news, and we all need to hang on to every bit of good news we get.”
Molly Armbrister covers the banking industry for the Northern Colorado Business Report. She can be reached at 970-232-3139 or firstname.lastname@example.org.