Jul 30, 2021 - Real Estate

Uptick in foreclosures and evictions on horizon in Colorado

Illustration of a hand about to pick up the last house surrounded by leftover imprints of other long gone houses. 

Illustration: Aïda Amer/Axios

Local officials are bracing for a spike in Coloradans displaced from their homes.

Driving the news: The federal foreclosure and eviction bans first implemented in September 2020 are set to expire Saturday. The protection was put in place to prevent a wave of homelessness caused by pandemic-related economic hardship.

  • President Joe Biden called on Congress on Thursday to extend the national eviction moratorium due to the threat of the Delta variant, but it remains unclear whether his political pressure will work.
  • The Biden administration last week rolled out a new measure that will allow homeowners to refinance their mortgages and cut monthly payments to help the nearly 1.8 million Americans in forbearance.

Why it matters: The pandemic exacerbated Denver's existing housing crisis, leaving thousands more families unable to pay rent and at risk of being kicked out of their homes.

  • More than 40% of Colorado adults living in households that are behind on payments likely will face eviction or foreclosure in the next two months, according to the Census Bureau's Household Pulse Survey.

Zoom in: Whenever the freeze lifts, the state will see an "uptick in foreclosures," though determining an exact number remains complicated, Denver Clerk and Recorder Paul Lopez, who's office oversees foreclosure filings, told Axios.

  • "Do we think that it's going to be likened to [the Great Recession in] 2009? I doubt it, but we're prepared," he said.

State of play: Lopez's team has been hosting virtual town halls to proactively explain the "confusing, intimidating, complex and scary" foreclosure process to residents struggling to pay their mortgages.

  • Lopez told Axios he is also considering hiring extra staff if demand for foreclosure processing proves to be overwhelming.
  • "Foreclosure notice is not game over," Lopez told Axios. "There are definitely different steps in the process that a person can take" to prevent permanently losing their home.

What else: Denver's housing department is deploying assistance for renters through its Temporary Rental and Utility Assistance program.

  • TRUA helped more than 2,500 renter households last year and has assisted more than 1,700 households so far this year, Melissa Thate, Denver's housing stability director, told Axios.

By the numbers: Denver's foreclosure numbers peaked in 2007 with a total of 8,240. In 2008 and 2009, the city saw an average of 6,141 foreclosures, said John Davies, the chief deputy trustee in the Clerk and Recorder's Office.

  • Since then, foreclosure rates have decreased dramatically. In 2019, the number only reached about 600, reflecting an upward trend in the national economy.
  • In 2021, private lenders (who are exempt from federal regulations) have filed at least 37 foreclosure notices as of July 28, Davies said.

Editor's note: This story has been corrected to reflect that more than 40% of at-risk Colorado residents are likely to face eviction or foreclosure within the next 60 days.


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