Colorado's foreclosure rate, as with the national foreclosure rate, has continued to climb throughout 2007. Colorado's foreclosure rates have risen approximately 38% in 2007. In fact the metropolitan Denver, Colorado region has had approximately 23,850 foreclosures from January 1, 2007 through July 1, 2007. The foreclosure rates are bad news for those those homeowners that have had their homes foreclosed but great news for buyers and investors who are now enjoying the best deals on their new homes.

What are the causes of all these foreclosures?

? Liberal lending practices by many mortgage companies.

? Inadequate or no disclosures by lenders of what an Adjustable Rate Mortgage (ARM) is and how it works.

? Buyers did not understand the potential impact of these ARM?s because they were not properly educated and did not take the time to get educated.
In regards to home loan types, ignorance is not bliss, and it often has financial consequences.

Lending practices are being tightened, underwriting is now being scrutinized, and most lenders are no longer loaning money on just stated income, or offering 100% loans. This is long overdue in this author's opinion. According to most reports the downhill trend and buyer's market will most likely carry well into 2008, possibly even into 2009. Now and in the next couple of years buyer's are going to have to be credit worthy and have a down payment (history repeats itself).

Buyers who purchased a home from builders have had a real disadvantage, Builder's often use their own mortgage companies, many of which did not take the time to educated the borrower/buyer and consequently the buyers had little or no idea what an adjustable rate mortgage really entailed or the amount of the adjustment that could result. Many new home buyers house payments went up hundreds of dollars a month which was not expected by the buyer and many of those homeowners were foreclosed on as well.

Always take a Realtor with you when contemplating purchasing a new home. Realtors acting as buyer's agents have a fiduciary duty to look out for the buyer's highest and best good.

Buyer's should shop for the best loans available. It's much more than interest rates that affect a loan. There are often what Realtors call ?Junk Fees' that can cost a buyer hundreds, even thousands of dollars that they don't have to spend. You might consider asking your Realtor for advise on how to shop for the right loan.

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