Facing Foreclosure?
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Take action now. Too many homeowners who are in foreclosure
in Colorado don't do anything until it is too late. When you start
missing your mortgage payments, contact someone experienced
with foreclosures to talk about the different options that are open
to you.
Foreclosure timeline. A new law comes into effect in Colorado
on January 1st, 2008 that results in the following steps and timeline
for people in foreclosure. |
Borrower misses payments. Technically the borrower is in default when one payment is missed. In actuality
most banks will wait until the homeowner is 3 or 4 payments behind before officially declaring the loan in default.
Lender records a "Combined Notice of Election and Demand" (the NED or NOD). Lender sets a sale date between 110 and
125 days away. The NED is filed at the courthouse and documentation is sent to the homeowner. This is your offical notice that
the clock is ticking. Keep all the documents you are sent and, if you have not done so already, take action now!
A sale notice is published in a newspaper for five consecutive weeks.
The property is sold at auction sale to the high bidder. Once this happens there is no
chance of the homeowner saving the house. i.e. there is no redemption period.
The whole process takes only about 140 days.
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Take a logical, non-emotional look at your situation. Sit down and honestly assess your situation by
taking a look at your monthly income and expenses. If you simply can't afford the payments it is better
to sell your home now and get a fresh start, than it is to hang on to it out of pride and
lose it in foreclosure and doing major damage to your credit.
Don’t fall prey to scams. You will be contacted by lots of
different people as soon as the NED has been recorded and mailed to you. Please
make sure to
check out references and make sure the person you choose to work
with has experience handling foreclosures and
short sales. By law, these people who contact you have to disclose
their intentions when you are signing paperwork. Be very wary of
anyone who tries to tell you that they are not making any money on the deal!
They are probably breaking the law!
Contact your lenders loss mitigation department. Regardless of how bad it seems your lender
does not really want your home back. Lenders are not in the business of owning homes and it is very expensive for them to
foreclose on a home. Try to work out a payment plan immediately.
Pay your taxes and your insurance. Do not stop making all payments. If you sell your
home these fees must be paid at closing.
If necessary, sell your home. This is NOT the time to list your property with a real estate broker in an effort try and get full
retail price. The fact is most homes in the Denver metro area are listed for many months before they sell - you simply
don't have the time to wait! Choose to work with someone who can assist you through
this very difficult and complicated process, and who can act quickly!
Consider bankruptcy only if this is the last option for you. Some lenders will file personal judgments
against you for the money they lose. Bankruptcy may protect you from that. Consult an experienced
bankruptcy attorney for advice.
Take action now. If chances are good that you will have to move, start looking for rental
properties immediately so you will plan your move properly. |
