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Property owners on the brink of losing their homes have six more months before the most sweeping changes in foreclosure laws in 15 years go into effect in Colorado.
The delay - from July 1 to Jan. 1 - is causing confusion for real estate attorneys, Realtors and bankers, many of whom are advising clients using outdated information, said Cynthia Torp, a Fort Collins real estate agent and founder of the Angel Network, which helps homeowners facing foreclosure.
Curing the loan means it's brought current, including back payments, attorneys' fees and other costs incurred.
Under current regulations, homes go to foreclosure sale more quickly, but homeowners have the right to redeem their homes within 75 days after sale.
That doesn't happen very often - only 4 percent of people whose homes go to foreclosure actually redeem their property, Torp said. But it does provide that one last chance to save a home, preserve credit ratings and home equity.
With foreclosure rates soaring in Larimer County - 1 in 275 homes - the change is significant and could help many homeowners, Torp said.
Torp said she knew of at least 20 listings that got pulled on the day of foreclosure sale because the Realtor didn't realize they had 75 more days to sell the property.
Fran Hardman, managing partner at Re/Max Advanced, 1018 Centre Ave., said changes in when the law took effect didn't get a lot of attention.
Many Realtors, including at her agency, weren't aware of the change until Torp let them know.
"Without that press, a lot of agents may end up counseling sellers without good information," she said.
The impact is so big for sellers "in particular with the redemption period," Hardman said. "People still have 75 days now to either get someone to buy their house or get it back themselves."
The extra time allows Realtors to get homes back on the market in hopes of finding a seller so "it won't ruin their credit and they can come out somewhat whole," she said.
RealtyTrac, a national company that tracks foreclosure listings, had 1,051 homes in Larimer County listed in some stage of foreclosure dating back to February.
Those numbers are probably high, Larimer County public trustee Debby Morgan said. Her office recorded 464 homes sold in public trustee sale through May, and 745 properties presented to office to go to foreclosure but were cured or withdrawn before the trustees sale.
Tonight the National Consumer Law Center is warning about something called a "mortgage rescue scam" ...promises of a bailout that end up costing the homeowner even more money they dont have.
The Washington Post says scam artists check courthouse foreclosure listings every day.
They offer to help anyone who receives a threatened foreclosure letter.
Consumer groups say talk to your lender about your options before you talk to any "rescue" service.
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The mortgage holder can usually initiate foreclosure anytime after a default on the mortgage. Within the United States, there exist several types of foreclosure. Two are widely used, with the rest being possibilities only in a few states.
The most important type of foreclosure is foreclosure by judicial sale. This is available in every state and is the required method in many. It involves the sale of the mortgaged property done under the supervision of a court, with the proceeds going first to satisfy the mortgage, and then to satisfy other lien holders, and finally to the mortgagor. Because it is a legal action, all the proper parties must be notified of the foreclosure, and there will be both pleadings and some sort of judicial decision, usually after a short trial.
The second type of foreclosure, foreclosure by power of sale, involves the sale of the property by the mortgage holder not through the supervision of a court. Where it is available, foreclosure by power of sale is generally a more expedient way of foreclosing on a property than foreclosure by judicial sale. The majority of states allow this method of foreclosure. Again, proceeds from the sale go first to the mortgage holder, then to other lien holders, and finally to the mortgagor.
Other types of foreclosure are only available in limited places and are therefore considered minor methods of foreclosure. Strict foreclosure is one example. Under strict foreclosure, when a mortgagor defaults, a court orders the mortgagor to pay the mortgage within a certain period of time. If the mortgagor fails, the mortgage holder automatically gains title, with no obligation to sell the property. Strict foreclosure was the original method of foreclosure, but today it is only available in New Hampshire and Vermont.
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