Foreclosure Bill Designed to Give Homeowners A Greater Opportunity to Keep Their Homes
This Denver Post article reports that Colorado had the highest ratio of foreclosures in the country this past March. Hopefully, if HB 06-1387, entitled 'Concerning Real Estate Foreclosures,' passes, the number of foreclosures in Colorado will decrease. Sponsored by Representative Garcia and Senator Veiga, the bill would allow the homeowner a longer period to cure a default before the foreclosure sale by lengthening the pre-sale cure period by 65 days. (Currently it is 45 to 60 days.) To do this, the owners' redemption period, currently 75 days after the sale, would be eliminated. Public trustee sales would, therefore, occur 110-125 days after the recording of the Notice of Election and Demand ("NED"). Click here for a summary of the Colorado foreclosure process.
Currently, owners can cure by paying off the default amount on the loan, which stops the foreclosure process. However, once the sale occurs, the only way owners have to keep their home is to redeem, which requires the payment of a much higher amount, which typically includes the full loan balance plus interest, attorney fees, and costs. The goal is to give owners more time to gather the money necessary to retain their homes by allowing a longer cure period. Experience shows that owners have a significantly better chance of curing rather than redeeming. (Both the Colorado Public Trustees' Association and the Colorado Bar Association worked extensively in shaping this bill.)
This bill will not affect an association's right to redeem after a unit in the community is foreclosed on. If the bill is passed, however, and it works as intended, associations may reap benefits in the form of decreased foreclosures (and the problems that accompany foreclosed properties - nonpayment of assessments, maintenance, etc.) in the community. (Click here for a Denver Post article on the ripple effect of foreclosures.)