Active Properties

Aldo Svaldi of the Denver Post has written a detailed article (Dec 18th / Business Section):

detailing outside investors may be a better option, but few are found at auctions to purchase REOs. Mr. Svaldi’s article covers:
- Lenders are taking back bulk of properties, causing all kinds of expenses to carry properties,
- Properties sit empty for months,
- Empty properties drive down their home prices, and hurting prices in neighborhoods,
- Why not get properties into the hands of investors quickly, and off the Bank’s books?
- There is the Bank’s perspective too.
Mr. Svaldi does a great job of detailing all the pros and cons of Banks holding properties.

It may not be a surprise how many times owners faced with potential foreclosure do not realize or understand that a ‘Short Sale’ is a possible alternative. Here’s some guidelines:

- The client will always have to disclose that they have had a foreclosure on any mortgage application, and many job applications they submit in the future and this can have an adverse affect on your future mortgage rates.

- Credit scores will be lowered by 300+ points and a foreclosure is the most devasting credit issue you can have in relation to future credit availability.

- A foreclosure is the one credit report item that is almost impossible to have “repaired”.

- Your lender can seek a deficiency judgmet (depending on the state) against you and collect for any amount they do not recuperate at a bank sale.

- Many employers run credit checks on progressive employees and foreclosure isone of the top items that will put a potential new hire in jeopardy.

- Many employers run credit checks and a foreclosure cna put a current position in jeopardy.

- Security clearances and government positions including but not limited to military and law enforcement can be jeopardized by a foreclosure.

Colorado Foreclosure Timeline from iNETProperty LCC

Colorado Law Effective January 1, 2008

click here:

Pre-foreclosure:

•Lender decides to foreclose and elects to foreclose with the Public Trustee on their Deed of Trust or through the courts judicially on their Promissory Note
•Foreclosure attorney hired and documentation sent from lender
•Attorney prepares Mailing List and all documentation for presentation to the Public Trustee
•Attorney sets hearing for Rule 120 Order that authorizes Public Trustee to auction property if no cure occurs before sale date

Cure period:

•Notice of Election and Demand recorded by Public Trustee within 10 working days
•Determination made by Public Trustee if property non-agricultural or agricultural within 10-20 days
•Sale date set from NED recording date
◦110-125 days for non-agricultural property
◦215-230 days for agricultural property
•NED and Combined Notice sent to owner, any guarantors on the note, and occupant only
•Notice of Intent to Cure must be filed 15 days prior to sale date
•45-60 days prior to sale, NED and Combined Notice sent to all parties on Mailing List
•Sale date published for 5 consecutive weeks prior to sale

Sale Occurs and Redemption Period Begins:

•Certificate of Purchase to highest bidder recorded by Public Trustee
•THERE IS NO LONGER AN OWNER REDEMPTION PERIOD
•Any junior creditor with lien recorded prior to NED or with any involuntary lien such as a judgment, HOA lien, mechanic’s lien or IRS lien that records after the NED, can file a Notice of Intent to Redeem within 8 business days
◦1st junior creditor: 5-19 business days to redeem
◦2nd or after: 5 business days to redeem
•Redemption prior to 12 noon on last day
•If junior creditor redeeming, Certificate of Redemption and Public Trustee’s Deed issued
•If no redemption, Public Trustee’s Deed to holder of the Certificate of Purchase or any assignee

Article from Land Title-

Several federal agencies and the attorneys general of all 50 states have initiated investigations based on allegations that banks failed to review foreclosure documents properly or submitted false statements when they foreclosed on properties. The allegations first arose in the 23 states that require a judicial foreclosure. Several of the largest mortgage lenders in the U.S. have suspended foreclosure proceedings in some or all states. While some lenders have resumed foreclosures in certain states, the uncertainty caused by the controversy has created a chilling effect on foreclosure transactions across the nation.

Colorado is somewhat insulated from the foreclosure controversy since the majority of foreclosures conducted in our state are completed through our unique Public Trustee system. The Colorado foreclosure process differs from most other states in that the Governor appoints a Public Trustee for each county. The Public Trustee’s Office is a statutory mediator in the Colorado foreclosure process. Judicial foreclosure is employed only when no power of sale clause is included in the deed of trust or there is a defect in that requires judicial oversight.

The types of documents at issue in the judicial foreclosure states are not required to complete a sale through the Public Trustee.

The Public Trustees are dedicated to fairness for all parties in the foreclosure process. The Public Trustees, by law, serve as the neutral, intermediate party between the lender and the borrower to assure that each party can exercise its legal rights in a foreclosure action:

Foreclosures are conducted by the Public Trustee’s office on a deed of trust containing a power of sale (right to sell property at public auction in the event of default).

•The procedure for conducting the foreclosure is set by statute and must be followed precisely.
•The deed of trust is an agreement between three parties: the Grantor (owner), the Public Trustee (who has the power of sale) and the Beneficiary (lender).
•It is the responsibility of the Public Trustee’s office to ensure that the owners, junior lienors and lenders understand the Public Trustee’s process and to ensure that each party complies with the statutes.
This is opposed to a judicial foreclosure, where a mortgage is an agreement between two parties, the Mortgagor (owner) and the Mortgagee (lender). Since no power of sale clause is included in the security instrument the lender must sue the borrower and obtain a court order to foreclose.

It is business as usual at Land Title. We have always thoroughly examined foreclosure proceedings appearing in the chain of title. Our underwriters are not currently requiring any blanket requirements or exceptions.