Colorado dropped to number 10 in the Nations ranking among states with the most Foreclosure activity according to the Denver Business Journal. Down from the number 7 spot this time about a year ago. Good news for Colorado Homeowners, but we’ve got a ways to go.
The figure that concerns me more, after more than 8 years of assisting Distressed Homeowners in the Denver metro area to avoid foreclosure, is the fact that more than 7 out of 10 still go to foreclosure auction without any type of intervention what so ever to attempt to Avoid Foreclosure! Considering the great alternatives the banks offer these days to avoid the foreclosure and how MUCH more devastating Foreclosure is compared to any of these alternatives, that is an appalling statistic.
The state had 36,246 properties with foreclosure filings in 2012, or one in every 61 households, said RealtyTrac, an Irvine, Calif.-based company providing foreclosure statistics. Foreclosure filings are the initial documents, filed with county public trustee’s offices, that are used to start the foreclosure process. That process ends with the sale of a property at auction, unless debt related to the property is repaid. In Colorado those initial documents filed are referred as the NED (Notice of Election and Demand). The foreclosure auction date is scheduled for approximately 4 months after the initial NED is filed. That date can be postponed for up to a year without requiring the lender to start the process all over. However, the lender has to have a good reason to do so. One reason that lenders find much more favorable than foreclosure is a short sale of the property. This is an option that works out better in the favor of both the lender and the borrower with benefits to both.
One of the best things a homeowner in a difficult situation on a home loan can do is find a good experienced realtor who specializes in short sales. From salvaging their credit rating to a few thousand dollars of potential cash for relocation expenses, there are a number of benefits over foreclosure. Not to mention a good chance of avoiding a deficiency judgment, this is much more likely with a foreclosure. A deficiency judgment gives the lender up to 6 years to collect after the homeowner has been evicted from their home. That’s a long time to be looking over your shoulder.