What Is the Foreclosure Process in Colorado?

Foreclosure is defined as a legal process in which a lender seizes and sells a home to a new buyer if the homeowner fails to make monthly mortgage payments. The foreclosure process varies from state to state. In Colorado, it can happen one of two ways: a Public Trustee Foreclosure or judicial foreclosure.

If a lender decides to foreclose on you, it will most likely happen via the Colorado Public Trustee System. A Public Trustee Foreclosure is more common, and lenders in Colorado rarely use judicial foreclosure. Usually, they use it only if there is a title defect that does not allow them to use the Public Trustee System. However, Homeowner Associations must foreclose via the judicial process.

In general, the foreclosure process in Colorado is complicated because most of the foreclosure laws in the Centennial State were drafted and lobbied for by the lenders. It is the only state in the US with such a complicated foreclosure process. 

The good news is that foreclosure can be prevented, even if the process has already started. If you are facing foreclosure, here is what you can do in order to save your home from that fate. 

How Can You Prevent Foreclosure?

There are different methods you can use to prevent your property from being foreclosed on.

  • Reach out to your lender. If you have missed your mortgage payment, the best thing you can do is contact your lender and explain the situation as soon as possible. Most lenders do not want to foreclose on properties because this process is expensive and has certain disadvantages. Your lender may offer you a loan modification or special payment plan. This will give you a chance to work out a way to catch up on your late payments. 
  • Consider a short sale. Before your lender seizes your property, you can try to sell it. A short sale is when a home is sold for less than what a homeowner owes on the mortgage. In general, a short sale is very similar to a traditional sale. However, there are some differences. The main difference is that a homeowner must notify a lender about the intention to sell their property and get the lender’s approval. They are also required to submit documentation explaining the reason for the short sale. A homeowner must prove that they are not able to make mortgage payments anymore and that a short sale would be the best and most effective solution in their situation. 
  • File for bankruptcy. If you file for bankruptcy early enough, it will freeze foreclosure. There are two types of bankruptcy: chapter 7 and chapter 13. They both pause foreclosure. However, filing a chapter 7 provides only temporary relief, while chapter 13 bankruptcy can stop foreclosure permanently. Before going ahead with this option though, you should consider the negative consequences of bankruptcy on your credit score and finances. 
  • Consult a foreclosure lawyer. You can either hire an experienced foreclosure lawyer or find an attorney that offers free legal help. Working with a lawyer may be very helpful because they can help you find a way to stop or pause foreclosure. 
  • Sell your home fast to a cash buyer. Not everyone knows this effective method to avoid foreclosure. Cash buyers are ready to buy your property under any circumstances, including foreclosure. They know how to deal with this type of property and do their best to make the selling process as easy and transparent for you as possible. 

Sell Your Colorado Home to We Buy Houses Colorado Springs

If you own a property facing foreclosure in Colorado Springs or any other surrounding town, and you want to sell it as quickly as possible, We Buy Houses Colorado Springs is ready to assist you. We purchase all types of properties under any circumstances, regardless of their location and condition. We do not require any repairs and renovations. We buy homes as is. Moreover, we pay cash, which means that you will receive your money immediately and can use it for a new down payment or any other purpose. If you have any questions about We Buy Colorado Springs or the foreclosure process, feel free to contact us.