A Colorado Division of Housing report shows that the number of mortgage loan payoffs last year in the Colorado Springs area was at its lowest point in the past 12 years — another sign of the recent slowdown in the single-family housing market.

The local reduction in mortgage loan payoffs mirrors what’s happening in several other counties, the report shows.

Mortgage loan payoffs — technically referred to as a release of a deed of trust — take place after homes are sold, owners refinance or they complete their purchases by making their last mortgage payment. An increase in payoffs indicates an uptick in buying and selling and the ability of homeowners to qualify for a refinancing; a reduction points the opposite way.

In 2011, mortgage loan payoffs totaled 32,040 in the Springs and surrounding El Paso County,  according to the Housing Division report released Wednesday. That was a 6.6 percent drop over the previous year and the lowest number since 30,187 in 2000, when the state began tracking releases of deeds.

After 2000, payoffs began to climb each year in El Paso County, topping more than 100,000 in 2003. Since then, however, payoffs have declined each year.

Teller County was one of a handful of areas included in the Housing Division report where mortgage payoffs last year saw an increase — totaling 1,730 in 2011, or a 10.7 percent gain over 2010. Still, payoffs in Teller County are down from their peak of 4,435 in 2003, according to the report.

Of 21 counties surveyed for the Housing Division report, payoffs totaled 235,749 in 2011, a 6.4 percent decline from the previous year and the fewest since the state started tracking releases of deeds.

But if there’s a sign of good news, it’s that mortgage payoffs in El Paso County totaled 8,023 in the fourth quarter of 2011 — an increase over each of the first three quarters of last year and a possible indication that housing activity is picking up, said Housing Division spokesman Ryan McMaken. The other 20 counties in the report also saw increases in the fourth quarter when compared with the third quarter.

“After two years of declines in mortgage rates without any big increases in activity, the fact that we did start to see some activity in the fourth quarter is a hopeful sign,” McMaken said.
Still, he cautioned, it will take several quarters to know if a trend is under way. The fourth-quarter numbers might suggest that more people have been able to afford a down payment or have accumulated enough equity in their homes that they can refinance, McMaken said.

“It’s just been very difficult for people to either purchase, to sell or to refinance, and that has just basically really pushed down the amount of release activity,” he said. “So if it’s pushing back up, it just might suggest that those trends are reversing themselves a little bit.”
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