Since the housing market crash of 2008, millions of Americans have suffered the very personal pain of foreclosure, so we are going to outline the entire process here to educate our clients of what you can expect when dealing with this unfortunate process, and what methods are effective at delaying and stopping the process.
So What Exactly is a Pre-Foreclosure in Colorado Anyway?
Many homeowners across America and Colorado are finding it extremely difficult to maintain their monthly mortgage payments.
After someone misses 90 days worth of payments, the lender will typically issue a “notice of default”, letting the homeowner know that they need to pay their mortgage bill, or they face the possibility of losing their home. This period of time that signifies the beginning of the foreclosure process is known throughout the real estate industry as “pre-foreclosure“.
Local lending institutions will usually give the homeowner 90 days to catch up on their payments before they move forward with the foreclosure process and begin seeking to regain ownership over the property in order to sell it to recoup their losses. Of course this “grace period” can vary by each individual lending institution, so check with your mortgage lender to find out how much time they allow before the eviction proceedings continue.
If the borrower still hasn’t caught up on their mortgage payments by the end of the 90 days (or other grace period term given by the lender) then they will be forced to take legal action to evict the person from the property. There are some options available to the homeowner during this “pre-foreclosure” period, where they can take action as to not allow the foreclosure to go through and negatively impact their credit scores for years to come.
Pre-foreclosure Options for Colorado Homeowners
If you’re more than 90 days behind on your payments, then you’re likely to receive a “notice of default” from your mortgage lender.
This letter will inform you that you have not made any mortgage payments on your loan for the last 90-180 days. It’s important not to panic and get stressed out.
You have several options at your disposal that can delay or even prevent losing your home:
- If your loan is still “above water,” (meaning you have equity in your house) you may be able to refinance your mortgage, receiving significantly lower monthly payments. Check with your local Colorado mortgage broker… or contact us and we can connect you with a reputable one in the area who can provide some more insight into this option.
- You may be able to quickly sell your home to a real estate investor that’s reputable in the Colorado area like us at HBR Colorado, using the cash that you receive during the sale to pay for the several months of back-payments owed (we can also negotiate with your lending institution, relieving all or part of your back payments), plus have something in your pocket to walk away with so you can keep your family afloat and find another affordable place to live such as an apartment or condo (and we can assist with this process as well, just ask!). We can buy your Colorado home in as little as 7 days with cash, and you will no longer be stressed out looking for ways to sell quickly.
- You can contact the lender and see if they will permit a short sale. During a short sale, you will typically sell your home for a lot less than it’s actually worth, and the lender will take the loss as a tax write-off at the end of the year. However, in some cases you may still be responsible for paying the difference to the lender if your home doesn’t sell for the full price of the balance that is still owed to the lending institution.
- You may be able to declare bankruptcy. Declaring bankruptcy is a final option, however this is not recommended because this can remain on your credit report for years, so we always recommend this as an absolute last resort!
Lenders are becoming more aware of the increasingly more common financial difficulties that most middle-class Americans are experiencing across this country and they’re willing to work with borrowers most of the time.
If you’re honest and communicate with your lender, you’ll often find that there are options that will allow you to remain in your home, or at least salvage your credit rating.
A foreclosure can often negatively impact your FICO credit score by 200-400 points and can prevent you from obtaining a loan of any sort for 5-7 years, so be very dutiful if you’ve received a Notice of Default from your lender.
But if you’re not able to find a solution with your lender working directly with them… connect with us. We may be able to help.
Ways We Can Help If You’re In Pre-Foreclosure
- We can potentially help negotiate a short sale – Submit your info on this website so we can evaluate your situation to see if we can help.
- We can buy your Colorado house fast for cash – We buy houses in Colorado and would love to make you an all-cash offer on your house too. Just fill out the form here to get started >>
- You can ask us questions and we can provide you FREE guidance and resources so you can make a well educated decision. This costs you nothing, there’s absolutely no pressure, no obligation… just free guidance without a catch. We love helping people going through foreclosure, as we have been through it ourselves, and know how difficult and confusing it can be. So our first mission is to help alleviate your stress and put you back into a position of power during this unfortunate process.
If you’re in the pre-foreclosure stage… you’ve still got some time to fix this situation. So don’t delay any longer, contact us today!
Just connect with your lending institution to see if they’re open to working with you… or contact us today if you’d like to see what price we can buy your house for, or to tap into our free foreclosure resources section and free guides that will help you navigate this challenging process.