If you’ve fallen seriously behind on your mortgage or property tax payments and aren’t sure if you can catch up, you may be worried that losing your home to foreclosure is inevitable. But that’s simply not true.

There are several things you can do to stop the foreclosure process in its tracks, such as selling your house to a cash home buyer, curing the default, or even filing for personal bankruptcy. But if you plan on doing any of those things, you’ll only be successful in your efforts if you act quickly enough.

Just how long do you have to stop foreclosure? Read on to find out.

What Is Foreclosure?

Foreclosure is a legal process initiated by a lender or mortgage holder when a borrower fails to meet the terms of their loan agreement, typically due to missed payments. In essence, it’s the action taken by the lender to recover the money owed by taking possession and selling the property used as collateral for the loan. This procedure safeguards lenders against borrowers who default on their mortgages. For homeowners, foreclosure can be an emotionally taxing experience, as they stand to lose a significant asset—often the family home. Understanding the mechanisms of foreclosure and the options available can provide distressed homeowners a better chance at navigating these rough waters. Foreclosure doesn’t just affect the borrower’s credit score; it impacts lives, uproots families, and alters communities. Thus, it’s essential for individuals to be well-informed and seek assistance as soon as financial difficulties begin to emerge.

What Is The Foreclosure Process In Colorado?

Colorado’s foreclosure process is both legal and compassionate, recognizing the human element behind every home and loan. Initially, when a borrower starts missing payments, the lender is required to send a breach letter, signaling the loan’s default status. This notice not only informs of the default but also provides a chance to rectify the situation. If no action is taken, a pre-foreclosure notice follows, signaling the lender’s intent to move forward. Crucially, in Colorado, the lender must then file a Notice of Election and Demand (NED) with a public trustee, marking the formal commencement of the foreclosure. But even then, hope isn’t lost for homeowners. The state ensures they receive timely notices, informing them of their rights, the scheduled sale date, and avenues for redress. While the entire process, from initial default to potential sale, can span 4-6 months, there are multiple checkpoints, urging homeowners to engage, communicate, and find solutions. Colorado’s approach underscores the importance of balance – safeguarding lenders’ interests while giving homeowners every opportunity to rectify their situation, underscoring that behind every house is a human story.

Receiving a Breach Letter

Most Colorado deeds of trust contain a provision that requires the lender to send you a breach letter once you fall behind on your mortgage payments. This letter serves as a notice that your mortgage is in default, but it also gives you an opportunity to cure the default (catch up on your missed payments).

If you do not cure the default according to the terms outlined in your mortgage contract or within the timeframe outlined in Colorado foreclosure law, the lender can begin the foreclosure process.

Receiving a Pre-foreclosure Notice

With most Colorado mortgage contracts, the lender must send a pre-foreclosure notice at least 30 days after the mortgage goes into default and 30 days before they file a Notice of Election and Demand (NED). This document should contain information about how to contact the lender’s loss mitigation department so that you can take steps to stop the foreclosure. But you must take action quickly. Most lenders will begin foreclosure proceedings approximately 30 days after they send the NED.

Filing the Notice of Election and Demand

Most lenders in Colorado will start foreclosure proceedings when you’ve fallen more than 120 days behind on your mortgage payments. To start the foreclosure process, the lender will file a Notice of Election and Demand (NED) with the public trustee, who will record that notice with the county clerk.

Once that notice has been filed and recorded, the public trustee will set a foreclosure sale date. The sale date must be between 110 and 125 days from the date the NED is recorded.

Receiving a Notice of Foreclosure

Once the NED has been recorded and the foreclosure sale date is set, the public trustee must mail you a “combined” foreclosure notice, which you’ll receive at two separate times.

This notice contains several important pieces of information that you’ll want to know if you plan to stop the foreclosure before the sale takes place. It should include:

Information about your right to cure the default
The date on which the foreclosure sale is scheduled
The location where the sale will take place

You should receive the first notice no more than 20 days from the date the NED was recorded. You should receive the second notice between 45 and 60 days from the scheduled foreclosure sale date.

Even if you receive these notices, you can still stop the foreclosure from happening, as long as you take action quickly. The lender doesn’t want to take your home any more than you want to give it up, and that’s why the notices contain information about your right to cure the default.

What You Can Do to Stop the Foreclosure

To prevent foreclosure — even after you’ve received a notice of foreclosure — you can bring the account up to date and reinstate the loan by paying all of your missed payments and any applicable fees. But for that to work, you must file a notice of intent to cure with the public trustee no later than 15 calendar days before the scheduled foreclosure sale.

Another way to stop foreclosure is to pay the full remaining amount of the loan, which is called “redeeming” the property, before the foreclosure sale happens. If you lack the funds to catch up on your missed payments or pay the remainder of your loan, you may want to consider selling your house to a cash home buyer. Home investors who buy houses for cash can complete the sale in a matter of days and get you the money you need to stop the foreclosure process in its tracks.

You can also file for Chapter 7 or Chapter 13 bankruptcy right up until the day before the scheduled foreclosure sale. Filing for bankruptcy will immediately activate something called an automatic stay, which prevents lenders from taking further collection action (including foreclosure) against you.

How to Stop a Foreclosure Auction Immediately

A foreclosure auction can be a distressing event, especially if you’re on the verge of losing your cherished home. However, even when the auction clock is ticking, there are strategies to halt the process immediately. Firstly, you can cure the default by paying all overdue amounts, associated penalties, and fees, effectively reinstating your loan. This requires you to submit a notice of intent to cure at least 15 days prior to the foreclosure sale. If you can’t manage this, redeeming your property by settling the full loan amount can be another route. For many, selling the home quickly, especially to cash buyers, can provide the funds needed to offset mortgage debts. Another potent strategy is filing for bankruptcy. Opting for Chapter 7 or Chapter 13 bankruptcy can invoke an automatic stay, instantly stopping all collection activities, including the foreclosure auction. While these methods can provide immediate relief, it’s crucial to consult professionals and consider long-term implications.

Sell Your House Fast With We Buy Houses Colorado Springs

If you need to sell your house fast to avoid foreclosure, our team at We Buy Houses Colorado Springs can help. We buy houses in any condition, and we don’t require a prepurchase inspection or take any commission from the sale. We’ll pay you cash at closing, and if you need time to arrange your move, we can work with you to develop a move-out timeline that meets your needs. To learn more about how we can help you sell your house fast, get in touch with us today at (719) 602-8814. Or feel free to request a cash offer, and a member of our team will be in touch with you right away.

When Is It Too Late to Stop Foreclosure?