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If a homeowner owes more on their property than it is currently worth then they can hire a qualified Colorado Springs real estate agent to market and sell their property through the negotiation of a short sale with their lender. This typically requires the property to be on the market and the homeowner between the date of home purchase and the date of the Colorado Springs short sale negotiation. A Colorado Springs short sale is an excellent avenue to help your family avoid the foreclosure of your home.
What should I do if I get behind in my mortgage payments?
It is never too late to get help. By seeking help early, there is a greater chance of success in avoiding foreclosure in Colorado Springs. As soon as you anticipate problems in paying your mortgage payment, contact your mortgage servicer to explain your current financial situation. Many servicers are willing to work with you if you contact them immediately, because they understand that individuals and families can face temporary job loss, serious illness, or other major life events that can impact their ability to pay their mortgage. Call and ask for your loan servicer's Loss Mitigation Department. Ask if you can participate in a "work out" resolution or obtain a loan modification. Be honest with the loss mitigation staff about your situation so they can help you choose the best option. They may be able to help you avoid a Colorado Springs home foreclosure.
What is a "work out" resolution?
Generally, a "work out" resolution involves resuming payments and arranging to pay the past-due amount over a short period of time. Sometimes, lenders will allow a "loan modification" which might lower your interest rate or extend the final due date of your loan - making your monthly payments lower.
How do I know if I qualify for any alternatives to foreclosure in Colorado Springs?
Your mortgage servicer and a HUD-approved housing counselor will be able to determine if you qualify for any of the alternatives to foreclosure in Colorado Springs. Just ask!
What should I do if I receive letters saying my Colorado Springs home is going to be foreclosed upon?
Do not ignore letters or phone calls from your mortgage servicer! If you are having difficulty in making your payments, take action immediately by calling or writing to your mortgage servicer's Loss Mitigation Department to explain your situation. Use the phone numbers found here, and be honest with the mortgage servicer about your situation so it can help you choose the best option. Again, they may be able to help you avoid a Colorado Springs home foreclosure.
Should I continue to live in my home?
Yes, you are in a far better position to save your home by continuing to live in it. If you abandon your property, you may not qualify for assistance to avoid foreclosure in Colorado Springs.
Should I consider refinancing?
Being able to refinance your loan depends on several factors. If you are already behind on your mortgage, your credit rating will be adversely affected. This could prevent you from obtaining a new mortgage at a reasonable interest rate. In addition, you may not be able to afford the fees and points that most lenders charge, especially if you have little or no equity in your home. If you do want to refinance, shop around for the best rate and terms possible and be alert for predatory lending practices. Refinance opportunities also exist with FHASecure through the federal government. Information on FHASecure.
A reinstatement is the simplest solution for a Colorado Springs foreclosure however it is often the most difficult. The homeowner simply requests the total amount owed to the mortgage company to date and pays it. This solution does not require the lender’s approval and will ‘reinstate’ a mortgage up to the day before the final foreclosure sale in Colorado Springs.
PLUS: Does not require Mortgage Company or lender’s approval.
MINUS: Requires that a homeowner be able to pay all back payments, fines and fees immediately.
A forbearance or repayment plan involves the homeowner negotiating with the mortgage company to allow them to repay back payments over a period of time. The homeowner typically makes their current mortgage payment in addition to a portion of the back payments they owe.
PLUS: Allows the homeowner to make back payments over time.
MINUS: Requires that a homeowner be in a financial position to pay not only their current mortgage but a portion of the back payments owed. Some mortgage companies will require a homeowner to ‘qualify’ for forbearance.
A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan the term of the loan or all or any of the above. This typically results in a lower payment to the homeowner and a more affordable mortgage.
PLUS: Reduces the payment a homeowner is required to make on a monthly basis and may reduce the principal balance of the loan.
MINUS: Requires that a homeowner ‘qualify’ for the new payment and will often require full documentation. Lender has to be actively pursuing modifications.
DEED IN LIEU OF FORECLOSURE
Also known as a ‘friendly foreclosure’ a deed in lieu allows the homeowner to return the property to the lender rather than go through a foreclosure in Colorado Springs. Deed in Lieu requires lender approval and requires the homeowner to vacate the property.
PLUS: Many times in a successful Deed in Lieu the lender will forego their right to a deficiency judgment.
MINUS: Requires that a homeowner vacate their property and may be reported to credit bureaus as a Colorado Springs foreclosure.
If a member of the military is experiencing financial distress due to deployment and that person can show that their debt was entered into prior to deployment they may qualify for relief under the Servicemembers Civil Relief Act. The American Bar Association has a network of attorney that will work with Servicemenbers in relation to qualifying for this relief.
PLUS: If qualified will lower payments on all consumer debt in addition to mortgage payments and you avoid a Colorado Springs home foreclosure.
MINUS: Must be active military to qualify.
