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Don't Delay. Time is of the essence.
Don't wait until you are several payments past due before
seeking help.
FORECLOSURE AND YOU
The foreclosure process takes a minimum of four months from the time that the
lender decides to start foreclosure. Keep in mind that you still own the
property until the foreclosure sale occurs. Therefore, it is in your best
interest to check into the options available to you to prevent the foreclosure,
as well as options available during the foreclosure.
The end result of foreclosure is the loss of your home plus any equity that you
may have. In addition, your credit rating will be affected, making it very
difficult to get any credit in the future. Also, if your home sells at the
foreclosure sale for an amount less than the amount you owe on your loan, you
may be required to pay the difference. This is called a deficiency judgment. In
addition, in some cased you may be required to pay income taxes on the amount of
any deficiency which is not paid.
WHAT YOU CAN DO
Lenders are in the business of making loans, not owning real estate; therefore,
they do not want to foreclose unless necessary. It is extremely important to act
as soon as you experience financial difficulties.
- Contact your mortgage company immediately. Be honest and explain your financial
situation. Be sincere and request that they help you with a suitable work-out
arrangement until you can resume normal monthly payments.
- Always keep accurate
records of the date, time, individual, and a summary of all conversations that
you have with your lender. Include your account number on all letters sent to
your mortgage company, and keep copies of such letters.
- Before approaching your
lender, prepare a payment plan that is reasonable and will work for you, and
present the plan to the lender. Do not agree to any payment plan that you will
not be able to handle. Whatever plan is agreed upon, make sure that the payments
are made according to the plan.
- Don't ignore mail from your lender. Read and
than reply as soon as possible to all correspondence concerning your loan.
Before approaching your lender, prepare a payment plan that is reasonable and
will work for you. Present the plan to the lender. Do not agree to any payment
plan that you will not be able to handle. Whatever plan is agreed upon, make
sure that the payments are made according to the plan.
- If the individual with
whom you are dealing with at the mortgage company is uncooperative, ask to speak
to the supervisor. In addition, explore some alternatives with a knowledgeable
person, such as a representative from one of the organizations listed in this
web page. Ask that the person to represent your situation to your lender on your
behalf.
- Selling your home is always an important option in order to recover your
equity. You may consult with a Hot Line Volunteer regarding the sale of your
home, for their assistance or referral.
- Colorado law generally requires
foreclosure investors to present you with a written contract outlining their
services. If you are occupying a home in foreclosure, you should be given a
Notice of Cancellation, which outlines your cancellation rights.
- Contact an
attorney who specializes in real estate law to check out your legal rights.
FORECLOSURE SEQUENCE
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If you are behind on your mortgage payments, and consequently in default on your
loan, it is possible that the lender may begin foreclosure proceedings at any
time.
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The lender or their attorney will file a foreclosure notice, called a "Notice of
Election and Demand", with the El Paso County Public Trustee.
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You will receive a notice from the public trustee which will advise you of the
foreclosure, disclose the sale date, and explain to you your "Right to Cure the
Default". Your right to cure the default allows you to stop the foreclosure by
paying the amount what you are behind plus any attorney fees and foreclosure
costs. You must file a "Notice of Intent to Cure" with the public trustee at
least seven days before the sale date, and pay the amount due no later than noon
on the day before the sale.
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The foreclosure sale is held 110 to 125 days from the time that the Trustee
records the Notice of Election and Demand for sale with the County Clerk and
Recorder. Once the sale is completed, you no longer have the right to cure the
default.
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By exercising your cure rights, you may save your home and equity from the
foreclosure process.
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