If it looks like your home will be foreclosed by your lender in Colorado, you may still have some options that you could employ as an alternative to the foreclosure process. This article will take a look at three potential foreclosure alternatives, which you can discuss with your lender to determine if you qualify.
Three alternatives to home foreclosure are:
Get a special forbearance: A special forbearance involves asking your lender to let you set up a repayment plan to get back on financial track. This plan might also include the temporary suspension or reduction of your mortgage payments to assist you in getting through your financial rough patch. Usually, lenders will require you to show that you suffered a significant income reduction, or a significant increase in your expenses if you hope to qualify for a special forbearance.
Mortgage modification: A modification to your mortgage might be possible -- like extending the terms of your mortgage payments so that the monthly payments become smaller. You might also be able to refinance your mortgage in a way that reduces your monthly obligations and gets you back on financial track. This option is particularly appropriate for those who have recovered financially after a challenging period, but they are having a hard time catching up on their payments.
Making a partial claim: A partial claim involves applying for a one-time FHA-Insurance fund payment that gets your mortgage back on track. If you can start making your full mortgage payments immediately, you might be able to qualify for this benefit.
Colorado homeowners may have other alternatives available to them that allow them to avoid home foreclosure. By discussing these options with a Denver-area real estate lawyer, home owners can decide which foreclosure alternative is right for them.
Source: FindLaw, "Alternatives to Foreclosure," accessed Aug. 31, 2017