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10/31/2004

Foreclosures vary by county

By Paula Aven Gladych
The Daily Times-Call

LONGMONT — Boulder and Larimer county foreclosures are on track to exceed last year’s totals, while Weld County’s total already has topped 2003 numbers.

“We’re still a little ahead of last year,” said Boulder County public trustee Jim Wills.

From January to the middle of October, Boulder County registered 426 foreclosures. In all of 2003, the county had 487.

“We seem to be unique in that our growth rate (in foreclosures) has come down,” said Wills.

Mary Hergert, Weld County’s public trustee, said that many foreclosures occur because people do not understand the terms of their loans.

“Lots of loans are for 120 percent of the price of the house. People are upside down, actually not having any equity in the house,” Hergert said.

People also “get real spread out on their credit cards. I get five or six (credit card applications) a week. I think when people get desperate they start borrowing against them. People are in tight spots,” she said.

She added that she doesn’t believe the rise in foreclosures in Weld County has anything to do with the economy.

“It has more to do with the financing they took out,” she said.

“A lot of those loans, where the payment started lower, a lot of payments are going up and people are barely making it. People get in over their heads or are losing a job.”

In Weld, foreclosures have risen every year since 1996, Hergert said. In 2000, the number was 345, in 2002, 628. In October, the number was 950 and rising.

Population growth could also account for part of the increases, because Weld County is one of the fastest-growing counties in Colorado.

Public trustee Angela Dazlich said foreclosures also continue to rise in Larimer County.

“We’re not seeing a leveling off, but I’m not seeing a tremendous spike either over where we were last year,” she said.

At the end of September, Larimer County had recorded 588 foreclosures, compared to a total of 625 in all of 2003.

“At this rate, we will go beyond the 625 we saw last year, unfortunately,” Dazlich said.

Larimer has seen the number of foreclosures rise substantially since 1996, when it recorded 150 foreclosures. In 1999, the county had 232 foreclosures. It recorded 360 in 2001 and 458 in 2002.

Dazlich said the some indicators show a slightly improving economy. For example, the number of people paying off or refinancing their mortgages has remained high.

Larimer County had nearly 51,000 mortgages refinanced in 2003. As of October, the county had 26,000.

Those numbers directly coincide with interest rates, Dazlich said. If interest rates are up, the county sees less refinancing. If they go down, the refinance rates drop.

Colorado bankruptcies up 10 percent

The number of bankruptcies across the state also continues to rise, according to Brad Bolton, clerk of the U.S. Bankruptcy Court in Denver.

“We’re still 10 percent above where we were last year,” he said. “For the most recent 12-month period, ending March 31, 2004, compared to March 31, 2003, we were No. 2 in the nation for the size of the increase for that 12-month period.”

From January through September 2004, Colorado logged 21,416 bankruptcies, for both business and individuals.

In 2003, the state had 25,956 bankruptcies.

Denver and the northeast region of the state accounted for 15,200 of the bankruptcies logged so far in 2004. Colorado Springs, Pueblo and the southeast region accounted for 4,707 bankruptcies. The court doesn’t break out bankruptcies by county. Boulder and Weld counties are included in the Denver figures, Bolton said.

Bolton said he believes the number of bankruptcies in the state is leveling off because the increase in bankruptcies from 2002 to 2003 was 20 percent, he said. It is only 10 percent this year.

Bolton added that 99.5 percent of bankruptcies in the state are related to consumer debt.

Bill Zurinskas, a bankruptcy attorney in Longmont, said it has “been bad for years now. It started before Sept. 11, 2001, pretty much with the stock market semi-crash of five years back.”

He added that the terrorist attacks in 2001 then hurt the economy even further.

“I’ve seen record filings for the past two years, especially in Longmont,” Zurinskas said. “Longmont got hit harder on Sept. 11 than anywhere. Six months later, even landlords in Longmont were calling me. Rents collapsed here. It was really bad here,” he said.

The poor economy has contributed to the number of foreclosures in Boulder County, he said, particularly in mobile home developments.

“People are really hurting,” he said.

They may have paid $60,000 for a home that is now worth $30,000, he said.

Credit card debt gets the most people in trouble, he said. He advises that people pay their credit cards off at the end of the month.

“Ninety percent of bankruptcies are fueled by overuse of credit cards,” he said.

Paula Aven Gladych can be reached at 303-776-2244, Ext. 211, or by e-mail at pavengladych@times-call.com.