The Colorado Division of Housing releases monthly statistics which track foreclosure filings and sales in Colorado. The October 2011 statistics reflect the good news that foreclosure filings are down as compared to data collected for October of 2010. Whether this positive trend will continue – remains to be seen. Here are the October findings by the Division:

● Both foreclosure filings and sales at auction were down in October 2011 when compared to October 2010.


● Comparing year-over-year from 2010 to 2011, foreclosure filings in October decreased 23.2 percent with totals falling from 3,059 to 2,350.


● October 2011 foreclosure sales (completed foreclosures) were down compared to October 2010 with a decrease of 28.3 percent from 1,308 to 938.


● Filings rose to the second-highest filings total reported in 9 months, but were down 3.3 percent from September’s total. Foreclosure sales at auction fell to the lowest total recorded since April 2008.


● In year-to-date comparisons, comparing the first ten months of 2010 with the same period this year, foreclosure filings were down 29.3 percent and sales at action were down 22.6 percent.


There is no question that from the HOA perspective the reduction in foreclosure filings is great news! However, whether the reduction of sales at auction is great news for associations remains unclear. The statistics don’t track why the sales at auction are down. Is it because homeowners are becoming more successful in modifying their loans or refinancing their homes? Is it because short sales are becoming more prevalent prior to foreclosure auctions? Is it because banks are delaying the sale of units to avoid adding those homes to their inventory? We just don’t know.


What we can tell you is the public trustee foreclosure timelines in Colorado can be detrimental to the financial health of HOAs. From the time a lender commences a foreclosure action, the lender has 110 to 125 days to set the initial sale date. Lenders then have the ability to continue the sale date for up to 1 year.  Continuing sale dates negatively impacts HOAs because homeowners know when they are going to lose their homes in foreclosure. As a result, they will generally stop paying their assessments prior to the lender commencing foreclosure. This coupled with a foreclosure process that can take up to 16 or so months – means that delinquent homeowners probably haven’t been paying their assessments for nearly 2 years before their home is ultimately sold in foreclosure!