Centennial Foreclosure Defense Attorney
Compassionate & Personalized Legal Representation
As a homeowner, facing foreclosure can be a stressful, confusing, and scary experience for you and your family. However, you should do everything in your power to avoid losing your home. One of the most important steps is hiring an experienced foreclosure defense lawyer to protect your home and your rights.
Whether you received a foreclosure notice or you believe foreclosure is on the horizon, let our legal team at Wagner Law Office, P.C. provide you with the effective defense you need to ensure you and your family keep your home for as long as possible. We can thoroughly review your financial situation and determine the best plan to avoid foreclosure.
What If I Miss a Mortgage Payment?
Obtaining a loan to purchase residential property in Colorado requires signing two documents: a promissory note and a deed of trust, which is like a mortgage. The promissory note is a document in which you promise to repay the loan, according to the terms of repayment. The deed of trust is a document that gives the lender a security interest in the property and often includes a power of sale clause. This clause means failure to make payments allows the lender to sell the home nonjudicially to recover the money it loaned you.
If you miss a payment, you may be subject to a late fee after the expiration of the grace period, which is generally 10 to 15 days prior to incurring late charges. You can review your monthly billing statement or the promissory note to find out the amount of the late fee.
If you miss several payments, the servicer will most likely send letters and call you in an attempt to collect. According to federal mortgage servicing laws, the servicer must reach out by phone to discuss “loss mitigation” options (foreclosure alternatives) between 36 and 45 days after a missed payment.
If you fall behind on payments, there is a provision in most deeds of trust that requires the lender to send a breach letter, which tells you the loan is in default. If you fail to address the default, the lender can accelerate the loan and seek foreclosure on the property.
The Foreclosure Process in Colorado
Under federal law, the foreclosure process does not start until you are more than 120 days past due on payments (with few exceptions). This 120-day period gives homeowners enough time to submit a loss mitigation application to the servicer.
There are two foreclosure methods in Colorado: judicial foreclosures and nonjudicial foreclosures. Most residential foreclosures in the state are nonjudicial, which have a minimal amount of court involvement.
The following is a summary of the nonjudicial foreclosure process:
- The “preforeclosure” stage occurs after you fall behind in payments and before the foreclosure process begins – at least 30 days prior to filing a Notice of Election and Demand (NED) and at least 30 days after default. The servicer can charge you a wide range of fees (e.g., late fees, inspection charges, etc.) and must send you a preforeclosure notice known as the “breach letter,” which informs you the loan is in default.
- The start of the foreclosure process starts when the lender files the NED with the public trustee, who then records it with the county clerk and recorder. Then, the public trustee mails the borrower a notice of sale within 20 calendar days after the recording date. The notice establishes the foreclosure sale date, generally 110 to 125 calendar days after the NED is recorded. Before the sale date, the trustee must mail the notice again.
- According to Rule 120 of the Colorado Rules of Civil Procedure, the foreclosing lender is required to ask the court to authorize the foreclosure sale as part of the nonjudicial process. A judge will decide if the lender has the right to foreclose on the property and sell it at the Rule 120 hearing. You will be mailed a notice of the Rule 120 hearing not less than 14 days before the response deadline. Failure to respond to the notice to dispute the lender’s right to sell the home will result in cancelling the hearing and authorizing the sale.
- The foreclosure sale is public and open to all bidders. The lender often makes a credit bid up to the total amount owed or less at the sale. The highest bidder at the sale will become the new property owner. Keep in mind, foreclosed owners lose the right to redeem the home after the foreclosure sale.
- After the foreclosure, the party who buys the home must make a demand for possession, which requires you to vacate (leave) the property.
If your home is sold at a foreclosure for less than the amount you owe on the loan, the amount of debt left over is known as a “deficiency balance.” This allows the bank to get a personal judgement known as a “deficiency judgment” by filing a separate lawsuit within six years. On the other hand, if the highest bidder offers more than you owe (as well as paying off all liens on the property), then you are entitled to that surplus money.
How Can I Stop Foreclosure?
Before the foreclosure sale, you have the opportunity to “reinstate” the loan and stop the foreclosure by catching up on missed payments, plus other costs and fees. You must file a notice of intent to “cure” the default with the trustee within 15 days prior to the sale date.
You may also file for bankruptcy, which can stop a foreclosure the day before the sale. Once you file for bankruptcy, the court will impose an “automatic stay,” which temporarily prohibits the lender from foreclosing on your home or otherwise attempt to collect any debt.
Other potential solutions include:
- Doing a short sale
- Selling the home and purchasing another that is more suited to your financial needs
- Negotiating a mortgage modification
Should I Hire a Foreclosure Lawyer?
Many homeowners going through the foreclosure process are reluctant to hire an attorney, mainly because they cannot afford legal representation. However, there are several situations in which having a lawyer on your side can result in a favorable outcome.
The following are reasons why you should hire a foreclosure attorney:
- You have one or more valid defenses to foreclosure – Some of the most common defenses to foreclosure include the foreclosing back failed to follow the required state procedures, the foreclosing party’s loan lacks standing, the mortgage servicer made a serious mistake when handling your loan, or the servicer used a defective declaration or affidavit. Your attorney can review your case and figure out which defenses apply to your case.
- You are on active duty in the United States military – Under the Servicemembers Civil Relief Act (SCRA) provides individuals on active military duty with special protections. Due to the complexities of this law, it is wise to have a lawyer make sure the lender is following it.
- You have a loan backed by the government – If you have a government-backed mortgage, you may qualify for certain foreclosure alternatives, such as special loan modification programs. Your lawyer can help you determine the options you have available.
- You want to keep your home – If your home has been passed down from generation to generation or you simply love the location, your lawyer can do whatever it takes to prevent foreclosure.
Our firm has a comprehensive understanding of the foreclosure process in Colorado. We can handle all the necessary paperwork, meet all the deadlines, speak and negotiate with your lender on your behalf, represent you in court, and help you save your home.