The impact of the national and global recession has been less in Colorado than many neighbouring States but is has still had a significant impact.  The principal areas that have been most widely noticed by the 4.8 million residents have been foreclosure homes for sale, unemployment and housing negative equity.

Unemployment in the State in 2007 was at 3.7 percent in October last year, and now that figure has risen dramatically to 5.3 percent, which although still below the national average, is high and equates to 147,000 people out of work across the State.  Pueblo has the highest recorded unemployment figure in Colorado with is right up at 6.7 percent, which is up from the previous month’s 5.2 percent, so that is not looking promising.

The Christmas season is approaching fast and for many people, spending money on presents is the last thing on their mind as they tighten their belt and concentrate on keeping their jobs and making regular payments on their mortgage.  It is at this time of year when credit can easily spiral out of control and once payments start being missed, the trend is difficult to reverse.

Unemployment and foreclosure are, unsurprisingly, closely related and as the unemployment rate has been rising, so has the number of foreclosure homes for sale.  This can be clearly seen by the numbers of desolate and vandalised and abandoned houses littering quiet neighbourhoods across Colorado.  When repossession occur, the residents often take fixtures and fittings with them, in some cases, stripping out copper piping.

The federal government acknowledges this unfolding crisis and has allocated an estimate $24 billion dollars of bail out money to assist and hopefully alleviate the crisis.  This money will most likely not directly affect those struggling to make payments and prevent their home from being repossessed, more likely it will be aimed at assisting in re-selling the high numbers of poor condition houses on the market.

Many residents are forced to live in their house next door to a foreclosed property, which in turn brings down the value of their home.  The bank becomes the owner of the property once it has been foreclosed and they have neither the time nor the inclination to maintain the houses properly as they become easy targets for vandals, bored teenagers, or squatters.

For many people who may have been made unemployed, or simply wish to move houses, now is a bad time as people find themselves in negative equity, or ‘underwater’ as the housing market terms the problem.  Colorado residents are doing everything they can to keep their heads above water.

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Results published for the third quarter actually show a slight decrease across the State with a 3 percent drop in sales and a 14 percent drop in filings, so at least perhaps there may be light at the end of the tunnel. Many experts are reporting that this may be a temporary glitch and that the slow down is only temporary as a result of the recently announced federal government bail out package and new legislation introduced over the past few months.

The $24 million bail out is directed towards assisting banks with moving on foreclosed properties that have been stagnant on the market place for months and even years, and also at providing advice for struggling householders about to enter the foreclosure process.

New legislation has been introduced to prevent lenders issuing a Notice to Default out of the Blue; the onus is now on the lender and not the borrower to get in touch 45 and then 30 days before the notice is issued. This is encouraging defaulting borrowers from ignoring the problem and they are now starting to get in touch rather than live in denial. The foreclosure hotline has also prevented an estimate 4,000 foreclosures across the State it is estimated.

The human cost of the crisis is still being felt despite the numbers being published in the press. The realty if that there are more neighbourhoods that now share their streets with boarded up, desolate and abandoned homes. This in turn brings down the value of the houses elsewhere in the neighbourhood. People are increasingly unable to sell their homes, for many reasons: they may live next door to a foreclosed home which has an overgrown lawn and broken windows; they may be ‘underwater’ or in negative equity; mortgage brokers are asking for significantly larger deposits than ever before which may be unaffordable, or worst of all, they may be about to become unemployed as the redundancy rate across the State is still rising.

So the experts may quote statistics, but the hard realty is that real people are still living with the fall out of the sub-prime mortgage debacle and the global economic recession. There may be light at the end of the tunnel for the publishers of the figures, but it doesn’t seem that way to homeowners.

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