Foreclosure: Understanding the process
This home, at 2115 N. 24th, is a foreclosure that has now has a new furnace, carpet and paint. It’s listed by Jan Phillips with Coldwell Banker Home Owners Realty for $129,500. The home has 1,888 square feet, with four bedrooms and two baths.
This home, at 2115 N. 24th, is a foreclosure that has now has a new furnace, carpet and paint. It’s listed by Jan Phillips with Coldwell Banker Home Owners Realty for $129,500. The home has 1,888 square feet, with four bedrooms and two baths.
This home, at 629 Middle Ridge Drive in Clifton, is a foreclosure listed by Sheri Griego with Real Estate West. The home has 1,078 square feet, with three bedrooms and one bath. List price is $108,900.
This home, at 629 Middle Ridge Drive in Clifton, is a foreclosure listed by Sheri Griego with Real Estate West. The home has 1,078 square feet, with three bedrooms and one bath. List price is $108,900.
This home is a foreclosed property listed by Jan Phillips with Coldwell Banker Home Owners Realty, 2499 U.S. Highway 6 50. The home sits on an acre, has 1,415 square feet, with three bedrooms and two baths. List price is $146,055.
This home is a foreclosed property listed by Jan Phillips with Coldwell Banker Home Owners Realty, 2499 U.S. Highway 6 50. The home sits on an acre, has 1,415 square feet, with three bedrooms and two baths. List price is $146,055.
This home, at 2413 Sandridge Court in the Redlands, is a foreclosed property listed by Sheri Griego with Real Estate West, 1001 N. Fifth St # B. The home has 1,940 square feet, with three bedrooms and three baths. List price is $194,400.
This home, at 2413 Sandridge Court in the Redlands, is a foreclosed property listed by Sheri Griego with Real Estate West, 1001 N. Fifth St # B. The home has 1,940 square feet, with three bedrooms and three baths. List price is $194,400.
This home at 430 Colorow is a foreclosed property listed by David Durham with Bray Real Estate, 244 N. Seventh St. The home is listed for $144,900 and has three bedrooms and two baths in almost 1,200 square feet. The home is only a few years old and features several interior upgrades.
This home at 430 Colorow is a foreclosed property listed by David Durham with Bray Real Estate, 244 N. Seventh St. The home is listed for $144,900 and has three bedrooms and two baths in almost 1,200 square feet. The home is only a few years old and features several interior upgrades.
This home at 529 1/2 Gardener Way in Clifton, is a foreclosure listed for sale by Sheri Griego with Real Estate West, 1001 N. Fifth St. #B. The home has three bedrooms and two baths in 1,188 square feet. List price is $89,000.
This home at 529 1/2 Gardener Way in Clifton, is a foreclosure listed for sale by Sheri Griego with Real Estate West, 1001 N. Fifth St. #B. The home has three bedrooms and two baths in 1,188 square feet. List price is $89,000.
Foreclosures are the 800-pound gorillas in the real estate market, putting downward pressure on prices and creating a surplus housing inventory that adds uncertainty to economic recovery.
Some states have a judicial foreclosure system, where the lender must file a lawsuit and take the borrower to court before the lender can take a property that’s in default.
Non-judicial foreclosures are handled without the intervention of the court, and Colorado’s public trustee system is unique among the states with non-judicial foreclosures.
“I know Colorado has the best system in the nation,” said Paul Brown, the public trustee for Mesa County. “The public trustee is the go-between the borrower and the lender.”
The public trustee is not an advocate for either the borrower or the lender, but for making sure that everything is handled in an open, legal and fair manner.
“The public trustees office helps alleviate mistakes,” said Brown. “It makes sure all the borrowers rights are protected. It doesn’t guarantee that they can keep their home.”
Lenders cannot do anything until the borrowers have missed three payments. After that, a lender can file a notice of election and demand (NED) with the public trustee’s office. Once the paperwork is filed, the trustee’s office verifies all the documentation to make certain that everything is accurate and then files it with the clerk and recorders office.
The office schedules a sale 110 to 120 days from the date of the filing with the clerk and recorder’s office. During the interval between filing and the sale, the public trustee’s office must send out two notices announcing the sale to everyone who has an interest in the property. The foreclosure is also announced five times in the newspaper.
Borrowers can file an intent to cure — which includes costs to bring the loan up to date, as well as attorney fees — late fees, interest and public trustee fees, at any time during the proceedings prior to the scheduled sale of the property. Lenders must notify the office of the minimum acceptable bid and a court order has to authorize the sale of the property. Foreclosure sales in Mesa County are scheduled for Wednesday mornings.
The intent of the notices and announcements are to make sure that everyone involved in the process is aware of what’s happening. Homeowners aren’t taken by surprise and lenders don’t have the right to seize property or change locks prior to the sale of the property.
If someone bids on a particular property, the bidder must have the cash to purchase the property by 1 p.m. on the day of the sale. If the property doesn’t sell, it goes back to the lender, who is then issued a certificate of purchase, which confirms that they are now the new owner of the property. At that point, the lender can evict the homeowner. It generally takes about eight months from the time someone misses his first payment until the home goes through the Public Trustee sale.
There are several real estate agents in town who specialize in foreclosed property, acting as the seller’s agent on behalf of the banks, Fannie Mae, Freddie Mac and in some cases, the Department of Housing and Urban Development (HUD). Agents who specialize in foreclosed properties often act as property managers, arranging for utilities to be turned on and paid on a monthly basis, making sure that necessary home improvements are done in a timely manner and arranging for any necessary appraisals and inspections that must be done prior to the sale of the property.
“Each property has a different challenge, and in the winter, you’re always worried about the heat and the water,” said Jan Phillips with Coldwell Banker Home Owners Realty, Inc., 2499 U.S. Highway 650.
Sometimes, a foreclosed property is sold “as is,” with no repairs or changes. Other times, particularly if safety or personal health is involved, the agent may recommend improvements. Some agents routinely advocate new paint or carpet, if they think it will help move the property.
“The good news is that we have a lot of properties and they are selling,” said David Durham with Bray and Co. Real Estate, 1015 N. Seventh St. “I think we have 17 properties under contract.”
Buyers who are looking to scoop up the deal of the century may be disappointed when they try to buy foreclosed properties. Lenders still want to receive fair market value for the property.
“We have buyers come in regularly making unrealistic, low offers on the property,” Durham said.
Last year, there were 1,600 foreclosures in Mesa County. So far, the county is on pace to match that number this year. Understanding the process won’t make them disappear, but it may reduce the anxiety surrounding the empty house and the for sale sign.
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