The Denver Post reports that Colorado is on track to top the record of 39,900 foreclosure filings set in 2007 as widespread unemployment makes it harder for borrowers to make their mortgage payments.  New foreclosure filings statewide during the third quarter reached a record high of 12,468, according to a report released Thursday by the Colorado Division of Housing. New filings for the first nine months of the year were up 18 percent to 35,112, compared with 29,852 during the same period a year ago.

So, if this is the case, where’s all the properties???  Inventory is down by 50% and the pickings are slim on the MLS.  Why are banks holding on to inventory?

Two reasons.

1. They can.  There’s no  pressure to liquidate and capitalize because they are getting free money from the government

2. They get more.  By flooding the market, they would force prices downward.  By limiting how much they sell, they ultimately get more for each property.