TRI-COUNTY REGION – If foreclosure filings are any indication, Ouray County may have escaped 2010 the least scathed by the continuing economic recession among its neighbors, San Miguel and Montrose counties.
With 56 new foreclosure files opened during the year, Ouray County saw about 21 percent fewer filings than the 71 cases opened there in 2009, according to Ouray County Treasurer and Public Trustee Jean Casolari.
“It’s a little bit less this year, which is nice,” said Casolari as 2010 came to a close. “But, again, it’s not back to normal,” she continued, defining normal as single digits, like the six files opened in 2006.
A total of 47 properties went to sale in 2010.
Ouray County properties swept up in the 2010 foreclosure fray included primary and secondary residences, and, in a new twist for Casolari, who has worked in her department since 1997, corporately owned mining claims.
“Until this, it was private residences or homes owned by developers,” she said.
To the north, Montrose County Treasurer and Public Trustee Rosemary Murphy reported opening 386 foreclosure files in 2010, a 34 percent increase over the 288 files opened by her office in 2009.
“Part of [the increase] was because a lot more people were without work and it caught up with them,” said Murphy, explaining that many people have simply run out of resources with which to stave of foreclosure.
Those properties that entered foreclosure process in Montrose County last year were also about 20 percent more likely to be sold at foreclosure than those that entered the process in 2009.
Rough calculations indicate that among the 2010 files, 228 properties, or 59 percent, actually went to sale, while just 112 properties, or 39 percent, went to sale in 2009.
While Murphy described the first wave of foreclosures as “investment properties and second homes,” the tides have now turned to include people carrying relatively little remaining debt on homes they have lived in for years.
“It’s primarily residents,” she said.
Foreclosure filings for 2010 in San Miguel County fell somewhere between the two neighboring counties, with 108 new files opened during the year, compared to 97 in 2009, according to San Miguel County Treasurer and Public Trustee Jan Stout.
Among the 2010 filings 46, or nearly 43 percent, eventually went to sale, a small increase from the 37 sold on the courthouse steps in 2009 – or 38 percent of filings.
“I think we’ll stay about the same,” said Stout, when asked to contemplate how 2011 might shape up.
“I would like to believe that we won’t have more than we did last year,” she continued.
That said, Stout noted that five new foreclosure files were already sitting on her desk awaiting processing as of the first business day of 2011.
“They all seem to be residential,” she said. “Primary and second homes.”
Local lenders offered mixed predictions about 2011.
Noting that the Telluride branch office he oversees does not have any pending foreclosures in San Miguel County slated for 2011, Alpine Bank Regional President Andrew Karow said, “I think that means 2011 is going to be better than 2010.” Karow, who oversees bank branches in San Miguel, Ouray and Montrose Counties, also noted that because many national lenders require struggling borrowers to enter the foreclosure process before they will even begin working on mortgage modifications, open files do not necessarily mean the inevitable loss of those properties to foreclosure sales.
“I’m generally optimistic,” he said.
In Ridgway, Alpine Bank Senior Vice President and Branch Manager Dennis Alexander also felt upbeat about 2011, noting that far fewer foreclosure advertisements ran in local papers at the end of 2010 than at its start.
“We’ve seen a marked improvement toward end of 2010 which we’re hopeful will carry over into the new year,” he said.
Alexander speculated that Ouray County could be emerging from the foreclosure crisis sooner than its neighbors because of its preponderance of middle-income retirees with modest nest eggs and low debt.
“Certainly it was the working class that really felt the crunch” of volatile income rates and loss of income, he said. “The demographics of our county are more heavily weighted toward the retiree sector which tends to be better off economically.”
“I’m very optimistic in 2011,” he continued. “I think that the people that have weathered the storm to this point will have the means to continue to service their mortgages and I think that unemployment numbers in the county have settled down.”
However, Community Banks of Colorado Regional President Tricia Maxon, whose southwest territory reaches from Durango and Cortez to Dove Creek, Telluride and Montrose, remained more skeptical about 2011.
“I think it’s going to continue to be troublesome,” she said. “I don’t see signs of improvement quite yet.”
Like Montrose County’s Murphy, Maxon predicted that people who have pieced together mortgage payments in recent years by borrowing from friends and family, taking on additional work, or cashing in retirement savings accounts, may run out of options this year.
“Now with the economy not improving they’re just throwing in the towel,” she said.
Maxon also pointed to a fundamental change in society’s view of foreclosure as contributing to potentially increasing numbers.
“It used to be embarrassing, or not cool, if you let your house get foreclosed on, but that’s not the case anymore,” she said. With so many people struggling to keep their homes, “They just don’t care anymore; it’s not as embarrassing as it used to be.”
Another trend may also contribute to even higher numbers in 2011, according to Maxon.
That is, homeowners whose property values are now less than they owe on their loans may simply decide to walk away from the debt.
“Between that group, which might be able to afford to pay but has stopped, coupled with other group that has done everything they can…I don’t see it improving,” she said. “I think it’s going to be another tough year.”
Compared to its neighbors, Maxon predicted a grimmer outlook for Montrose County in 2011, where there the sheer volume of foreclosures has undermined property values for everyone.
“Montrose was definitely harder hit,” she said. “Real estate prices have fallen dramatically.”
In Ouray County Dave Wood, chairman of the board of Citizens State Bank of Ouray, held something of the middle ground.
“In our whole bank system we have not had any foreclosures until this year and we are now starting one, but it’s just one,” he said, referring to the four-branch system. “That doesn’t mean I don’t think there might be some others, but we’re actually in a pretty good condition.”
Yet while Wood’s bank may be enduring the foreclosure storm relatively well, “That doesn’t mean all is well on the Western Slope,” he said.
“We probably won’t see a new flood of them but don’t think we’re through,” he said.
“By the end of 2011 we might be back to the normal number,” he speculated.