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Nancy
Guzman is an Expert Realtor for the Metro Denver Colorado area, who can help you
decide where to live. Because, Nancy understands finding your special
place means taking in many factors that include accessibility to work, education
and recreational activities. It also includes the size and style of your
home, the style of the neighborhood that will make you feel more at home.
All of these factors must come together to make your new Metro Denver Colorado
home, feel like home.
FORECLOSURE
INFORMATION FOR METRO DENVER COLORADO
WHEN CAN A LENDER FORECLOSE?
When a bank or other lender gives you a mortgage, they impose some
requirements on top of asking you to pay back the loan with interest. For
example, you typically are expected to maintain the property, keep it
insured and pay taxes.
The lender usually will foreclose only if you are more than one month
behind in your payments, and only after you have been given notice that
you are in default in your payments. It is rare for a lender to foreclose
on other grounds. If you owe delinquent taxes or are not maintaining the
property, then the lender could initiate foreclosure proceedings even if
your payments are current. That's an unlikely occurrence, however. More
typically, the lender would just require that your taxes and insurance be
paid up.
In most cases, you will receive a notice from the lender of any
perceived problem, and you will have the opportunity to correct the
problem in order to prevent the foreclosure.
Most mortgage notes (the document in which you promise to pay the
money) give borrowers the right to correct any default on which
foreclosure is based, up to five days before the foreclosure. If you are
having difficulties making mortgage payments, your best bet is to inform
the lender of the problem and see if it is possible to work out a plan to
reduce the overdue debt. The lender, however, has no obligation to do so.
DOES A DECLARATION OF BANKRUPTCY END THE FORECLOSURE PROCEEDINGS?
No, at most you would delay the foreclosure. The foreclosure proceeding
will be "stayed", or made inactive, possibly until the
bankruptcy proceeding is concluded. However, once the bankruptcy stay is
lifted, the lender is free to foreclose.
CAN AN OWNER SELL A HOUSE DURING FORECLOSURE PROCEEDINGS?
Yes. Nothing prevents you from finding a buyer and entering into a
contract. The property is still yours until the foreclosure judgment is
entered. As long as you receive the sale proceeds more than five days
before the scheduled date of the foreclosure, you should be able to
"cure" your debt through a mortgage payoff and convey "good
title" to your buyer.
If you do find a buyer, you should inform the lender of the impending
sale. As a condition of releasing the mortgage, the lender will probably
require you to repay the cost of bringing the foreclosure action. But with
a pending sale in place, the lender may refrain from taking more actions
for which you could be charged. If you are attempting to "cure"
your debt, the best strategy is to communicate your intentions to the
lender.
CAN A PERSON JUST GIVE A HOME TO THE BANK?
If the bank is going to institute foreclosure proceedings, you might be
able to persuade it to accept a deed to the property instead and release
you from liability. The advantage to doing so would be to avoid having a
foreclosure on your credit record. On the other hand, if the bank does
foreclose, you still may receive some money if anything is left after the
bank sells the house and recoups the mortgage.
One thing you don't want to do is completely abandon the property
without notifying the bank. In that case, the bank could foreclose and
could also institute legal action for any deficit that still remains after
the sale of the property (a right the bank has with any foreclosure). If
you still owe the bank $100,000 on your mortgage agreement, and the condo
is sold in foreclosure proceedings for only $90,000, then you will still
owe $10,000. This type of transaction will definitely affect your credit
rating. You would be better off trying to negotiate an agreement with the
bank, so that you do not appear irresponsible.
WHAT IS THE PROCEDURE OF A FORECLOSURE?
- the lender files action in court seeking to obtain "title
transfer" (foreclosure)
- notice of the pending foreclosure is served on the owner and any
other interested parties, such as the holder of a second mortgage and
anyone having a lien on the property
- notice of the pending foreclosure proceeding is recorded on the land
records
- the court establishes a timetable for the foreclosure, setting a
deadline by which the owner can redeem the debt and "cure the
default"
- if the money owed is not paid, the court enters an order
transferring title from the owner to the lender
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