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Category Archives: Colorado Foreclosures

How to Stop your Denver Area Property from going to Foreclosure

If you are facing foreclosure of your Denver Area property you have several options to avoid foreclosure. The main thing is to act now. No more waiting. The sooner you begin to check out your options the more you will have. As time goes on your best options may no longer be available.

Communicate

If you are already behind on your mortgage payments your lender will be calling and sending out notices. Don’t ignore them. Communication is key even if you don’t know what to do and do not have any way to pay them. If you don’t want to talk to them respond in a letter so they know what is going on with you. You don’t have to be subjected to nasty collection calls but most lenders have developed a more humane approach to find out your situation and let you know what your options are. Most lenders want to avoid foreclosure as much as you do. If you are not sure which approach is best for you or don’t fully trust your lender to have your best interest in mind, contact a professional for assistance in determining the best approach for your situation.

What to expect

Once you are 30 days late on a payment for your Denver area home you are in default but not in foreclosure yet. Any time after you are 3 months behind your lender may file the Notice of Election and Demand (NED). That is the official step that begins the foreclosure process in Colorado. You will know because you will receive multiple copies via certified mail. Filing of the NED establishes a foreclosure auction date about 110 to 120 days out. At this point you have about 4 months before the auction of your Denver area property. This date can be postponed for up to a year at the discretion of the lender, but they have to have a good reason to do so. Having a foreclosure avoidance program in process and under review is the most common reason for a lender to postpone auction. Some lenders have a policy of not postponing, so do not wait to take action.

Here is a list of 10 alternatives to Avoid Foreclosure. Some will apply to you and others will not:

  • Short Sale
  • Refinance
  • Bankruptcy
  • Forbearance
  • Reinstatement
  • Repayment Plan
  • Rent the property
  • Mortgage Modification
  • Deed in lieu of Foreclosure
  • Service member’s  Civil Relief Act

Click on the link for a free report I am offering called “Your First Steps to Avoid Foreclosure” that goes into more detail on each of these 10 options.

Your Plan of Action

The following are steps you can take if you are delinquent, in foreclosure, or on the verge of missing a mortgage payment on your Denver area property.

 Your First 3 Steps in the Right Direction

1. Gather financial information (bank statements and paystubs for the last 2 months).

2. Communicate with your lender that you will be seeking foreclosure avoidance counseling.

3. Contact an educated real estate professional like me to learn about your options to avoid foreclosure.

Feel free to contact me any time for more information or assistance.

 

 

 

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Better to Buy Denver Area Bank Owned or Short Sale?

As we have discussed before, Short Sales are on the rise as a better alternative to Foreclosure. Definitely a better deal for the Distressed Homeowner and the lender. What about the Buyer?

Realty Trac’s Foreclosure & Short Sales Report for the fourth quarter of 2012 which covers over 900 metro areas in the United States shows that Denver is not in the list of top metro areas for the best deals in either category. This is good news for our local real estate market on our way to recovery, but maybe not so much for investors looking for the best deals out there.

A recent article by the Realty Trac staff shows the 15 metro areas they found to be the best buys in the two categories. Santa Barbara, CA topped the list of Short Sale Best Buys with an increase in short sales of 52%, an average price of $283,825, and average amount short of ($178,201), and at the bottom was Detroit, MI, with an average price of $97,233. At the top of the 15 Best Markets for Buying Bank Owned Foreclosure properties was Cleveland, OH, with a 141% change in REO sales, average sale price of $57,782, and 56% discount off Non-Distressed sales, while #15 was Sarasota, Fl, with a 19 percent change, and average price of $127,181.

In our own Denver, CO metro area there were 9,072 residential properties sold in the fourth quarter of 2012. Short Sales made up 8% of the total at 724, while 8.3% were Bank Owned foreclosures, 762 of the total properties sold. The average sale price for Bank REO’s was $210,347, a 35.5% discount from Non-Distressed properties, and Short Sales sold for an average of $224,543, a 31.2% savings. The average days on market for a Bank Owned property was 77, while Short Sales were 159. This statistic reveals the additional time it takes for a short sale transaction to be approved by the lender.

Of course there are other factors to be considered in the purchase of a distressed property. Bank owned properties in almost every case have sat empty for some length of time. Some for a year or more. This allows for more chance of pipes bursting from winter freezes, along with a myriad of other potential damage to the property, including vandalism. A much higher percentage of foreclosed properties have been stripped or damaged by the previous homeowners, angry at their circumstances and having to leave their home under duress. Short sales in most cases have been occupied by the homeowner until closing. While there may be some deferred maintenance due to financial constraints, most homeowners have a certain pride of ownership and are grateful for the more dignified approach of selling their own home with the blessing of their lender in a short sale transaction to avoid foreclosure. These homes are likely to be in better shape once acquired at closing, requiring less of an investment for repairs.

No one is to say which is the better choice for a particular buyer, but it is good to consider all that is involved in the acquisition of a distressed property beyond just the price. The good news is there are opportunities for many buyers with different objectives.

 

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