Distressed Homeowners in Colorado

Distressed Homeowners in Colorado

A challenge many families face in today’s economy is:

What will I be facing if I can no longer make my mortgage payments?

We receive so many phone calls and emails from Parker Colorado homeowners asking about options when facing and having to deal with foreclosures and short sales. Douglas County Colorado is no exception to the short sale and foreclosure problem facing all of America.

For quick answers to Colorado foreclosure and short sale questions.

  • Below you can see a few foreclosure and short sale options.

There are many new programs offered by your lender through federal assistance programs like the Making Homes Affordable program & HAMP which are available today to borrowers whereas the Federal Government provides financial incentives to the banks to modify existing mortgage payments for their borrowers.

The first and foremost ambition of many homeowners in distress is to try to keep the family home to continue to provide stability for themselves and their children. In some cases this can be the best resolution if the family’s income has not been drastically impacted by the loss of a job or a family illness. Loan modifications are hard to qualify for and in some cases difficult to continue with their compliance requirements.

Also See:

When a loan modification is not available or has been denied the next step is to prepare for the eventual loss of the family home to a pending foreclosure.

A foreclosure and the loss of the family home is one of the most difficult and stressful events which can happen in someone’s life. Along with bankruptcy, a foreclosure’s impact is one of the most negative hits to one’s credit score

There are other alternatives to a pending foreclosure.

Deed-in-Lieu of Foreclosure:

In some cases the lender will allow you to sign a Deed in Lieu of foreclosure to transfer title to the lender immediately which allows them to avoid a lengthy and expensive foreclosure process. It provides for the lender to take immediate possession of the property and begin the resale process. There is also the possibility of the lender paying you relocation expenses if you leave the property in a clean and undamaged condition. This option typically is only available if the is not a second mortgage or other judgments against the property.

Assumption:

In very rare cases an assumption allows a qualified buyer to take over the payment on the existing loan. This option may be available even if the loan is non-assumable. This option would only be available if there is adequate equity in the property in today’s marketplace to attract a buyer to assume the entire loan balance.

Short Sale:

A short sale provides the opportunity to sell your property prior to the lender seizing the property through foreclosure. Even if the lender has begun the foreclosure process, Colorado statute provides for a 120 day period prior to the sale to allow the borrower to attract a buyer and negotiate a short sale with the lender. This process will transfer a free and clear title to the new buyer and avoid the foreclosure sale from taking place and impacting the borrower’s credit in its most severe capacity. A short sale is the most popular foreclosure avoidance tool and is used as a vehicle for the lenders to avoid having to take possession of the property and reselling it in the open market.

I am hopeful that these alternatives to foreclosure can be used as a tool to help you understand just one of the processes and resolutions you may have with your lender if the circumstances arise and you are facing a default on your mortgage.

…Lou