When you purchase a home in Pueblo that involves a mortgage (you borrow money), normally a deed of trust is issued on behalf of the lender which basically allows the lender to foreclose or demand that payment in full be made on the loan given to the borrower if you get behind on your payments.
Foreclosure is a legal procedure whereby property used as security for a debt (deed of trust) is sold to satisfy the debt in the event of default in payment of the mortgage note.
In Colorado a foreclosing attorney, who represents the lender will file the required documentation set by the Colorado Revised Statues 38-13-101 with the Office of the Public Trustee in Pueblo County.
After the office of the Public Trustee receives the required documents, the Public Trustee files a Notice of Election and Demand with the Clerk and Recorder of the County. The foreclosure sale date for non-agricultural property is set between 110 and 125 calendar days after the recording of the Notice of Election and Demand, for agricultural property the sale date is set between 215 and 230 calendar days. Agricultural property is based on assessment by the County Assessors Office. The Combined Notice of Rights to Cure or Redeem is published in a general circulation newspaper for five consecutive weeks.
Before the sale, the owner of the property has the opportunity to Cure the Default on the property by filing an Intent to Cure with the Public Trustee’s office. The Intent to Cure must be filed fifteen (15) days prior to the scheduled foreclosure sale date. The owner must present the necessary amount to Cure the Default (bring the loan current) by 12 noon the day before the scheduled foreclosure sale.
You Have Options
Option 1 – Loan Forbearance or Modification
The loss mitigation department where you have your mortgage may make arrangements with you to pay some of the back payments now and the balance within a certain period of time. It’s very important to note, when you miss a payment you will be receiving a call from the mortgage company and you should answer or return the call. This is your chance to explain the reason why you have missed a payment. If you missed a payment because of an unfortunate situation that is temporary you could be given the opportunity to work out something with the lender.
Option 2 – Reinstate Your Mortgage
You have up to until 12 noon the day before the scheduled foreclosure date to catch up on your payments.
Option 3 – Refinance
You may be able to refinance by restructuring your debt or if you have enough equity in your home. Be aware there are scammers out that claim they can help. Do not pay any fees in advance if you explore this option.
Option 4 – Chapter 13 Bankruptcy
Another option would be to file bankruptcy and the foreclosure process will be stopped. The foreclosure is said to be “Stayed by Bankruptcy”. The court must issue an order “Lifting the Stay” before the Public Trustee can proceed with the foreclosure.
The lender/foreclosing attorney can continue the sale for up to twelve (12) months unless the property is Stayed by Bankruptcy. Property that is Stayed by Bankruptcy can be continued indefinitely. After the twelve (12) months, property that has not been Stayed by Bankruptcy must be withdrawn from the office of the Public Trustee.
Option 5 – Sell Your Home on the Open Market
If Options 1 to 4 are not available to you, this option in most cases is the best option. You should have enough time to properly market and sell your home. I can help you determine the market value of your home and give you a realistic time frame as to how long it will take to find a buyer. If you have enough equity in your home to pay off your loan balance this will relieve you of the pressure of the foreclosure process and save your credit.
Option 6 – Short Sale
If option 5 selling your home will not bring in enough money to pay off your mortgage balance you still may be able to get the lender to consider a short sale. A short sale in Pueblo basically consists of a negotiation process with the lender where the lender agrees to wipe the debt clean and remove the lien on the property. This process has become common since the housing market crash in 2007.
A short sale will result in a negative credit reporting to the borrower. However, the borrower who has short sold a property has a much shorter waiting period for a loan than the borrower who let the property go to foreclosure. Their is a program called the FHA Back to Work Program which could allow you to qualify for a new loan a year after a short sale. It has become the norm that a borrower who acted responsibility by short selling their home should not be punished for a longer period of time.
What Should You Do
If options 1 through 4 prove to be unattainable, give me a call and arrange a meeting with me. I will do my best to evaluate your situation, determine the marketable price of your home, and explain all your options to you. I can truly sympathize with you and I know very well from experience that bad things happen to good people.