Increase in Foreclose Homes Expected If Ritter Signs Bill
May 13th, 2009 by 
Joseph Smith
A three-month drop in the number of foreclose homes in Colorado is expected to come to an end now that the Legislature has approved the House Bill 1276 and Governor Bill Ritter is planning to sign it.
During the first quarter, Colorado experienced a significant drop in foreclosures filings and sales, which the Division of Housing hailed as a positive development for the state’s economy.
For the first three months of this year, newly filed foreclosures totaled 10,745, a drop of 8 percent from the 11,634 posted in the same period last year. Foreclosure filing is the first step of the foreclosure process. Meanwhile, actual foreclosures for the first quarter totaled 4,354, a drop of 26 percent from 5,889 in the same quarter the previous year.
However, the number of foreclose homes is expected to rise again with Ritter’s plan to sign the bill that will provide a 90-day delay in foreclosures. Industry experts believed that lenders will try to cram as many foreclosures as they could before the bill takes effect on July 1. They anticipated around 900 to 1,000 foreclosures per week before the implementation of the bill.
The bill, which is known as the Foreclosure Delay Act, provides lenders and distressed homeowners 90 days to prevent foreclosures by working with HUD-certified mortgage counselors.
The bill, which Ritter is scheduled to sign on June 5, requires that within 20 days after the borrower received a notice of foreclosure, he must contact a certified counselor who will assess his debts and financial situation. If the counselor’s assessment showed that the borrower deserves a loan deferment, he will be given additional 90 days to negotiate with the lending institution or bank.
The loan holder will be notified that the borrower is eligible to have his loan deferred. Upon receipt of the notification, the loan holder must delay the repossession for 90 days. During the deferment period, the borrower is required to make partial payments amounting to two-thirds of the total monthly payment unpaid prior to delinquency, plus the insurance and taxes equal to one-12th of the total annual amount due.
Homeowners who do not want their properties to become foreclose homes have until July 2011 to avail of the 90-day delay option.
