Ouray Real Estate Foreclosures

Written by the Ouray Plaindealer

Posted by: Erin Eddy

www.ourayland.com
www.ridgwayland.com


Lately, a good chunk of Ouray County Treasurer Jeannine Casolari's time is taken up with the business of foreclosures ... more time than she would like.

"There's other things that go on in this office, like tax collection," she said, in forthright frustration. "February is a busy time with first half property tax payments coming in. Yesterday we collected half a million dollars of property taxes and processed them in a day."

Add to that the flood of foreclosures Casolari and her staff are currently processing, and it makes for a very full plate.

Casolari, whose steady, thoughtful demeanor is belied by a frenzy of curly gray hair and colorful glasses, says that for the size of the county, said the volume of foreclosures she's seeing is nothing short of remarkable, tripling from its rate of a year ago, with no end in sight.

In the past, Casolari said, three to six foreclosures in a year was a lot. In fact, she conducted just two foreclosure sales in 2008. But come October, the national sickness hit home. "What started as a slow year all of a sudden magnified," she said. "All of a sudden, I was getting three foreclosures in a week." By the year's end, eight more foreclosures had been filed in the county.

This year, the numbers are off the charts, in unprecedented territory, with 10 filed already, not two months into 2009. "To see us in the stages of tripling, that's what's scary," Casolari said. "It hasn't let up yet. I expect more next week. We get phone calls from people all the time asking about the fees to get the process started."

Simply keeping up with the statutorily mandated schedule for processing a foreclosure is a daunting task, upon which she and her two staff keep a hawkish eye. "All three of us are looking at these deadlines together," Casolari said.

The process goes like this: the treasurer's office receives the foreclosure packet from the attorney representing the bank which holds the defaulted mortgage. Within that hefty packet are the deed of trust on the property, the original promissory note, combined Notice of Sale, Right to Cure, and Right to Redeam, along with copies of Colorado Revised Statutes 38-38-100 through 705, an Initial Mailing list which has all known addresses for the property owner and other interested parties, a Notice of Election and Demand (NED), and a check for Casolari's expenses, which include two certified mailings, and a mandatory publication for five consecutive weeks of the Combined Notice in the county's newspaper of record.

Casolari notifies the attorney that the foreclosure packet has been received, and takes the NED across the hall to the office of the County Clerk to officially record it, and the clock starts ticking.

Exactly 125 days later (or up to 230 days for agricultural property), after an intricately timed process of mailings and legal notices, another Ouray County property owner will most likely be foreclosed upon.

Once in a while, someone is able to cure the default, and when that happens, it is a moment of quiet celebration for Casolari and her staff in the midst of the maelstrom.

Casolari's seen just one cure recently. Most often, the treasurer has to move forward with the statutorily mandated foreclosure proceedings, because that is her job.

She will conduct an initial and supplemental mailing of the foreclosure documents to every addressee specified by the attorney. The property owners alone may have up to eight different addresses listed by the attorney, ranging from their P.O. box to any known physical addresses, and in some cases, even to "occupant" at the last known street address, in the hopes that whoever is living there now will be able to forward it to the defaulted property owner in question. "They're trying everything to contact that person," Casolari explained.

Out of the 30 or so mailings that Casolari may send out for any one foreclosure, up to 20 may come back. But in the best case scenario, the property owner is successfully notified and able to cure their default – in other words, pay off the debt owed. They must provide written notice of intent to cure, within 15 days prior to the sale. And after the debt has been settled, the attorney withdraws the foreclosure.

The cure must cover the cost of the prosecuting attorney's fees, and depending on the way the mortgage is structured, the considerable interest which may have accrued since the time of the default. More often than not, this is simply beyond reach of the property owner. Then Casolari must conclude the foreclosure with a sale at the front entrance of the Courthouse.

"It's a difficult thing," Casolari said. "It's hard to say I'm doing a foreclosure sale, but it's part of my job." This month, she's held two foreclosure sales already, one on Feb. 11, another just last Wednesday on Feb. 18.

"Most of the time, no one shows up," Casolari said. It's just herself standing there, with her staff as witnesses. The property goes back to the holder of the note. A certificate of purchase is issued, and after the redemption period has expired, she issues a confirmation deed to the holder of the note.

While other parts of the nation have seen banks offloading foreclosed properties at rock-bottom prices to speculators who flock like vultures with cash in hand, Casolari said "...that hasn't been our experience here." Banks, she observed, are selling properties at the face value of the mortgage, plus interest and fees, often for more than the original amount owed by the defaulted property owner.

What she has seen plenty of, however, are the predatory lending practices that triggered the national collapse of the housing market. "With some of these loans, it's just amazing anyone would have signed on the dotted line, with the kind of interest that's accumulating," she said.

Another national trend reflected locally: homes recently gotten into with minimal down payments, such that the amount of debt on the house is equal to or in some cases more than the amount for which the house was purchased in the first place.

"Another sad thing – certain individuals went into foreclosure on more than one property," Casolari noted.

Most of the records on foreclosed properties show that the mortgage has been "bundled," sold by the initial bank that issued it (often a local or regional bank) to a larger institution specializing in mortgage investments.

Conversely, it used to be that the only attorneys she saw involved in foreclosures were specialists from the Front Range. Now, she's seeing more local and regional attorneys getting in on the act. If it is their first time to conduct a foreclosure, often the packet they send is not in order, and Casolari has to ship it back to them for revision.

It is a lot to keep track of. "Some public trustees have hired a full-time assistant to deal with the foreclosures," Casolari said of her regional colleagues. "Everyone is affected." So far, Ouray County's numbers haven't escalated to an emergency level. But it might just be a matter of time.

"I didn't know this would happen to this magnitude," Casolari said. "It hasn't let up yet. Having three foreclosures a week, you almost need one person, simply to manage the timetable."

While Casolari and her staff struggle to keep up with their workload, the families and individuals in foreclosure throughout the Ouray County are trying to come to grips with what is happening to them. Here is portrait of one such family. (Their identity has been withheld to protect their privacy.)

This two-income middle class family, with two children, built their 2000-plus square foot home in 2005, before the economic crisis had started rumbling. They got into a large mortgage at a time when construction costs were going up; half of the land they purchased was covered by the proceeds of the sale of their former home, and the rest of the expenses for land acquisition and home construction came from a loan.

Between two salaries, they were easily able to afford their mortgage, and had no other large expenses in life except the norm--two car loans, one student loan, low credit card balances, etc.

A job loss, and health issues within the family, changed all that. The couple are now in the process of refinancing to save their home from foreclosure, and cut their monthly mortgage payment to make it affordable. They are not working with a local bank, and said their mortgage company was not helpful until they hired a loan modification financial assistant to get them in direct contact with their lenders.

Even if they are able to refinance, the fact remains that the husband still cannot find work locally. The family plans to leave the area if they lose their house, and move in with relatives until they get back on their feet.

While the numbers coming out of Casolari's office show that many families and individuals across the county are in the same difficult position, this couple said they don't know anyone personally who is also to the point of losing their home. "It seems like everyone keeps talking about how tough times are, but I don't personally see many families that are cutting back on expenses (vacations, impulse buying, dining out, etc.)," the wife said.

In the meantime, as they await news from their lender, they are also casting a hopeful eye toward the nation's capitol and its leaders.

"I am hopeful Obama's plans will help not only us and people in our same situation before it is too late, but the country as a whole to get out of this economical crisis that we are all in, regardless of how each is doing as an individual family," said the wife. "I keep hearing about the available money that is out there, but it is not easy to get the assistance needed. It would be nice to have a support group of people who are in our same situation, to get together with to find out what is and is not working to save our homes."

Casolari often refers property owners in foreclosure to Colorado Revised Statutes 38-38-100 through 705, as well as to the Colorado Foreclosure Hotline, 1-877-601-HOPE, http://www.coloradoforeclosurehotline.org/