Foreclosure is the legal procedure by which the lender in a mortgage arrangement takes possession of the property (typically a house) that secured the loan. This is done when the Lafayette, Colorado debtor has repeatedly failed to make their payments. Foreclosure often requires the house to be sold at auction. Often, banks want to get rid of the property as soon as they can, in order to make as much money as possible, and move forward.
In every state, including Colorado, borrowers have the option to go through foreclosure by judicial sale. This means that the auction will be supervised by a court, to make sure that the bank makes an effort to get as high a price as possible (to increase the chances that the whole balance will be covered, as well as the odds that there will be some money leftover for the debtor). In some states, original mortgages are treated as "non-recourse" loans, meaning that, at most, the lender can take possession of the house in the event of foreclosure, even if it is worth less than the amount due. The bank cannot go after the borrower for the remaining balance once it sells the house. You should consult an Attorney in Lafayette, Colorado to find out if this is the case here. This typically does not apply if the mortgage has been refinanced.
How Can I Avoid Foreclosure in Colorado?
First, you should never dismiss the matter. As unpleasant as it seems, it is necessary to stay on top of the issue. Ignoring the problem will never make it go away. It is essential to remember that the bank does not really want your Lafayette house - they expected to make a profit through the interest on your loan, and that's what they'd prefer to do. Accordingly, they will probably make reasonable accommodations to your financial situation if it means that you will be able to make some form of payment to them.
If no deal can be worked out, or the mortgage payments have become prohibitive, you may consider a "short sale". While the lender has to consent to it, many will take a moderate loss if it means avoiding foreclosure (which lenders usually treat as a last resort). This allows you to sell the house for whatever price it can fetch on the current market, and hand the proceeds over to the bank. If the sale nets less than the balance, some or all of the deficiency may be forgiven. You might also consider a "short refinance" which allows a part of the debt to be forgiven, and lets you refinance the rest.
How Can A Lafayette, Colorado Attorney Help?
If you are worried about foreclosure, a good Lafayette, Colorado real estate Attorney may be able to help. An Attorney can increase your chances of keeping your home, and help minimize the financial impact if keeping it proves impossible.