Foreclosures not a big problem in Eagle County
Much ado has been made about the foreclosure situation in other parts of the country, and certainly in some areas it has been a disaster for homeowners and lenders.
However, a closer look at those numbers reveals that, like so many other things, the media has grossly overblown the problem, and unfortunately the public has bought into the concept that real estate everywhere is going down the tubes.
According to the Mortgage Bankers Association National Delinquency Survey, the problem really is isolated to four states (California, Arizona, Florida and Nevada). In addition, a large number of those loans in foreclosure are investment properties. Between 21 and 32 percent of the foreclosures in these states were investment properties.
In 34 states foreclosures are decreasing. In 12 states foreclosures increased slightly or remained flat over the first quarter of 2007. Michigan and Ohio have a high foreclosure rate but things appear to be leveling off, according to Doug Duncan, the MBA’s chief economist. He also noted that overall the foreclosure rate encompasses 1.4 percent of the mortgage loans out there, and while that is much higher number than anyone would like to see, it also shows that 98.6 percent of mortgages are not in foreclosure nationwide.
Although it should be noted that 5.12 percent of all mortgage loans in the nation are at lest 30 days delinquent, so there truthfully could be more foreclosures to come, although a great many of those loans will be cured either by the homebuyer catching up, selling the house or renegotiating with the lender.
Closer to home, Eagle County residents might ask “what, me worry?” and justifiably so.
Eagle County has about 27,500 parcels of improved whole ownership property. From Jan. 1, 2006 through Sept. 7, 2006 there were 44 foreclosures against whole ownership residential properties. This year-to-date there have been just 43 filed.
That is one foreclosure for about every 687 properties. Compare this to some areas that are seeing rates 20 times that and you can see why it is not a major factor in property values here. Also, nearly 40 percent of foreclosures in Eagle County are cured prior to going to sale.
There are thousands of timeshares in Eagle County as well, and by some estimates there are more timeshare owners than whole owners although I cannot get an exact count on those. The Christie Lodge, for example, has something like 9,000 owners.
Foreclosures against timeshares have declined rather significantly as well. In 2006 there were 89 year-to-date and in 2007 there have been only 63 year-to-date. Overall, the foreclosure rate is down 18 percent for the county this year, while other isolated areas of the nation have seen rates increase by 200 percent or more.
If you are looking for a property in Eagle County and dreaming of stealing a foreclosure, I would suggest you might need a reality pill and find better ways to spend your time. Of the few properties that do end up at auction the lender is generally happy to keep it because often they actually do make money.
Often times the sellers have so many other problems in their life they never made an honest effort to sell the property, and the lenders often buy the property themselves and market it at full market value and often make money on them. In 27 years of involvement in real estate and mortgage banking in the valley I can only think of a couple of people I know of that profited handsomely from a foreclosure and many others have chased them for years and never scored a decent property.
Chris Neuswanger is a loan officer at Macro Financial Group in Avon and can be reached at 970-748-0342. He welcomes inquiries from readers.
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