Colorado Mortgage Defaulters Have a Place to Turn
For Colorado mortgage holders facing the threat of home foreclosure, there is a place to call for help and hope.
The Colorado Division of Housing’s foreclosure hotline is receiving about 75 calls per day, the most from Fort Collins, Colorado Springs and the Denver housing market.
A recent survey followed up with 1,500 callers to see what had happened to them since their calls.
It shows 74 percent of callers were one to three months behind in payments, had an imminent sale date or had received an eviction notice. An additional 19 percent of callers were curious about foreclosure, concerned or 30 days behind in payments.
Of those surveyed, 38 percent are staying in their homes, 34 percent are choosing to leave their home and 28 percent are still working with the counselor or mortgage company.
“A smart decision might be moving out of the property. But just walking away without notice is a dangerous thing to do,” said Zachary Urban, director of Homeownership Counseling at Brothers Redevelopment Inc., in Denver.
Most who call the hotline are very close to delinquency, Urban said.
Sara Allen, executive director at CCC in Northern Colorado, said Larimer County ranked eighth in 2005 and ninth in 2006 in foreclosures in the state. “Seventy-five percent were refinanced loans. Lots of people took out cash in the last mortgage boom,” Allen said.
Allen said it is impressive to see how many family and friends call to try to help family members who are close to foreclosure.
“The northern Front Range had the highest number of calls to the hotline. This is not so much an indictor of the market but represents the partnership municipalities have taken to promote the hotline,” Allen said.
Callers are referred directly to the closest housing agency and forwarded directly to an intake specialist to make an appointment with a housing expert, Allen said. A housing counselor can advise the homeowner how to protect the equity in the home by making reasonable choices.
During each consultation after calling the hotline, the housing counselor sits face to face with the homeowner to build trust and confidence. “This is extraordinarily valuable, and saves time,” said Michael Rosser of the Colorado State Housing Board.
Lenders stand to lose $25,000 to $45,000 when a Colorado home loan goes into foreclosure, said Ryan McMaken, community relations director at the Colorado Division of Housing in Denver.
“There are things you can do with your lender to negotiate and walk through a complicated process,” Allen said.
The lender must take control of the property, fix it up and get it sold.
“Foreclosures devalue the community. It is in the best interest of everyone to get it back up and running,” said Kathi Williams, director of the Colorado Division of Housing. “Property owners don’t understand that walking away from a home is not freeing them. The home loan lender can hit them with deficiency judgment and can report it to the IRS.”
In Larimer County, 414 homes started foreclosing this year, Allen said. “We’d like to see more people of the 414 who have had foreclosure notices come to us for help. Not enough of them are seeing us.”
SOURCE: The Coloradoan