What is foreclosure?

If an owner stops paying their home loan their lender may foreclose. With a foreclosure the lender forces the sale of the home. The lender’s goal with the sale is to get the balance of the loan amount due to them. After a foreclosure the owner no longer owns the home and they need to move out. The Homeowner Association (HOA) can also foreclose if an owner stops paying the HOA fee.

What can owners do?

Owners must call the program if they miss a house payment or are notified of a foreclosure. The program will guide them to help. The Boulder County Personal Finance program gives free help. They are trained to help people facing foreclosure. They can also help before foreclosure. For the best results people should address issues right away. Waiting to act makes it harder to stop a foreclosure.

If addressed early owners can work with their lender or HOA. Sometimes a payment plan can be worked out. This allows the owner to get caught up on payments. Selling is another choice for owners. This may be a good path if the ongoing monthly cost is more then an owner can pay. This can help them to avoid foreclosure. Foreclosures become part of a person’s credit report. Having this on a credit report can have negative effects in the future. Selling may also allow the owner to walk away with some money from the sale.

What happens to the program restrictions?

The program restrictions end if there is a foreclosure sale. At the same time the covenant converts to a deed of trust. The value of this is the sale price minus the affordable price. As a result, the owner will get nothing from the sale. The lender will get the money they are owed.

The program also has a deed of trust valued at $10 on the home. After a foreclosure sale the program can use this deed to redeem the home. This means the program pays the person that purchased it at the sale. The program then becomes the owner of the home. As an owner the program will make any repairs that are needed. The home will then be sold to a new qualified buyer.