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Colorado Foreclosures Continue to Drop in November

According to a report from the Colorado Division of Housing, foreclosures have fallen in several of that state's largest counties. Among the state's 12 most populated counties, new foreclosure filings fell 4.2 percent in November from 3,059 in October to 2,932. Foreclosure sales, meanwhile, dropped 8.6 percent to1,195 from 1,308 in October.

The drop in foreclosures was expected, stemming in part from a slowdown in foreclosure sales imposed by some of the nation's largest lenders amid the recent "robo-signing" scandal. Bank of America, the nation's largest lender, actually halted all foreclosure activity for several weeks in late October and early November.

Foreclosure sales in Colorado had dropped off significantly from September to October, a drop of 38 percent. But the slowdown has apparently carried on into November, even though lenders said they had resumed normal foreclosure activity. Another factor in the drop in foreclosures is loan modifications, where lenders try to alter the terms of a loan so a borrower can catch up.

Lenders, having huge backlogs of foreclosures waiting, are slowing the process down to avoid losses from plummeting home prices. Most lenders also slow the process down at the end of the year to avoid evicting borrowers during the holiday season. Lower year-end staff levels also contribute to a slowdown.

Foreclosure filings in Colorado's 12 largest counties in November are down 10 percent from a year ago, and are about even with 2007 levels.

December 23, 2010

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