Foreclosure is the legal procedure by which the lender in a mortgage arrangement takes possession of the property (usually a house) that secured the loan. This is done when the Westminster, 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 collect 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 "non-recourse loans," meaning that the lender may only recover ownership of the house in the event of default. If the house is now worth less than the balance of the mortgage, the lender has to take the loss. You should speak with a Westminster, Colorado attorney to see if this state is one of them. However, it is almost always the case that this protection does not apply to loans that have been refinanced.
How Can I Avoid Foreclosure in Colorado?
First, and most importantly, you should not dismiss the issue. Failing to respond to foreclosure calls from your lender will not make an issue go away. You should stay in touch, and be honest with, your creditor as much as possible. One should remember that banks generally don't want to take your house in Westminster. They issued your mortgage expecting to earn a profit on the interest. Taking possession of, and selling, your house is a last resort for them. Therefore, if you are honest with them about your financial situation, they are likely to make reasonable accommodations to keep you from defaulting.
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 generally 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 may also consider a "short refinance" which allows a portion of the debt to be forgiven, while refinancing the rest, hopefully under better terms.
How Can A Westminster, Colorado Attorney Help?
If you are facing foreclosure, a good Westminster, Colorado real estate lawyer can help. While keeping your home might not always be possible, an attorney can increase your odds of success, and help you minimize the negative impact if you do end up losing your home.