Understanding The Foreclosure Process in CO
Before we share our helpful information about the foreclosure process in the CO area, let’s review what exactly foreclosure is. If you’ve never gone through the process, it can be intimidating and scary for most. And believe it or not, for some that have never faced foreclosure, they don’t realize how it is going to affect them now, or later.
The foreclosure process takes place when you have fallen behind on payments on your mortgage payments. The bank or mortgage company has legal rights to start this process in order to repossess said property so they can try to re-coop their losses.
And while going through a foreclosure process isn’t any fun, it certainly isn’t the end of the end either … If you understand the foreclosure process in Denver, CO. If you find yourself in a foreclosure situation, contacting a lawyer is always recommended. But the information we provide here will give you some insight and knowledge that can assist you in navigating the process.
The Basic Stages
Every step of the foreclosure process in important, with some being more important than others. The information we’re providing here pertain primarily to Colorado, and while it is basically the same everywhere, there may be some difference in other states.
In Colorado, there are two different ways banks and mortgage companies can foreclose:
- Judicial sale
- Power of sale
Property Scouts has worked with many people over the years with both processes and we can help you too. Give us a call at 866-366-4863 or send us a message here and we will be glad to walk you through either process.
In either situation, it can take anywhere from 3 to 6 months of missing payments before your case gets to court. During that time, the homeowner will receive several notices from the lender advising them their account is in arrears, meaning there is either an overdue payment or several payments behind.
The Judicial Foreclosure Steps:
- A suit is filed with the courts by the mortgage lender.
- The homeowner received a demand for payment letter from the courts.
- A time frame is given for the homeowner to bring their payments up to date through the courts, usually 30 days, to stop all current foreclosure. procedures. Some courts will give the homeowner an extension.
- If no payment has been made during that time frame, the courts will enter a judgment against the homeowner, giving the lender permission to sell the property, which is usually done by auctioning it off. All parties with interest in the property are given notice of this auction.
- After the property has sold, a law enforcement officer, usually a county sheriff, will serve the homeowner/occupants an eviction notice demanding to vacate immediately.
The Power of Sale Steps:
- The homeowners received papers from the mortgage lender demanding payment without court involvement – although judicial review may still take place.
- One the waiting period has expired, the property in questions is transferred to a trustee by way of a deed of trust, giving that trustee control.
- At this point, the trustee then has the power to sell the property back to the lender by way of a public auction after the homeowner or other parties with interest in the property have been given notice.
Other than the homeowners, other parties that may have an interest in the property may be banks, contractors or co-signers.
What To Expect After The Auction
Once the foreclosure has been completed, the proceeds are used to pay the loan off. If the proceeds of the auction do not cover the balance of the mortgage, the lender can place a deficiency judgment against the borrower for the balance.
Some states limit the deficiency judgment amount to the fair value of the property. Other states allow the bank to file the deficiency judgment for the full unpaid balance.
Because deficiency judgment laws vary by state, Property Scouts has found this resource to be valuable information, state-by-state.
We Are Here To Help
Property Scouts advises anyone that calls us to try and avoid foreclosure altogether. If you find yourself struggling to make your payments, a simple phone call to your lender may find another solution. Or working with Property Scouts, we can often help negotiate your loan to get a discount off the past due amount and avoid foreclosure.
Property Scouts is an experienced investor and we have worked with banks many times over the years to negotiate a plan with lenders to lower the amount, and in some cases, we have managed to get the past due amount eliminated.
If you have a property around or in the Denver, CO area with payments in arrears and foreclosure possibility, give us a call today! We are experts in helping people resolve those issues or get the property sold fast. Here are more foreclosure articles to help you in understanding the foreclosure process in CO.