Meanwhile, the total number of homes included in foreclosure listings declined by 16 percent in 2008 compared with figures in 2007.

About 39,307 filings for foreclosures were recorded by public trustees in Colorado in 2008, compared with filings of 39,915 the previous year. Furthermore, foreclosure listings in the state showed a reduced number of 21,301 homes from 25,320 the previous year.

However, real estate market analysts warned that the increase in unemployment rate and softening of the economy may delay any economic recovery.

Development Research Partners economist Patricia Silverstein predicted a growing foreclosure listings in Colorado in 2009, below the 2008 levels.

Meanwhile, Ryan McMaken of the Colorado Division of Housing pointed out that the foreclosure prevention plan, which includes an expanded time for owners of distressed properties to modify their mortgage loans, and efforts of lenders to help borrowers keep their properties out of foreclosure listings, have reduced the number of repossessed homes in the state.

In 2008, a revision in Colorado law extended a homeowner's time to modify his loan by 120 days, an increase from the 60 days in the previous system.

Re/Max Southeast realtor Ron Woodcock explained that due to the backlog of foreclosure-related cases, it took a long time for lenders to process foreclosures. He added that, to save time and the cost involved in the foreclosure process, most lenders are willing to accept terms to avoid including a home in Colorado's foreclosure listings.

Major banking institutions are also cutting down the number of foreclosures that they process, Woodcock added. Lenders such as Chase and Wells Fargo have issued foreclosure moratoriums while they await standards on modifying mortgage loans.

Colorado Mortgage Lenders Association President Terry Jones said that standards for loan modification will be released by the federal government on March 4, 2009.

Colorado was one of the first states to encourage lenders and borrowers to negotiate for a revised loan payment scheme that would be affordable for the borrower.

On the other hand, fixed-rate mortgages are not that vulnerable to default unlike loans with interest-only payments, adjustable interest rates and no or low down payments. In Colorado, areas with high foreclosure rates are counties of Adams, Weld, Park, Arapahoe and Denver.