Colorado foreclosure rates have dropped over the last year, but they are still among the highest in the country, according to a a recent report by the Denver Business Journal, which cited figures released by RealtyTrac.
The report outlines a nearly 30 percent decline in the number of foreclosures filed in 2010 compared to 2011. But still, our state is ranked 9th in the nation for the most foreclosures.
Our Colorado bankruptcy attorneys know that filing for bankruptcy can help you to stop a looming foreclosure of your home.
What many homeowners may not understand is that they don't have to be current on their mortgages in order to save their home from foreclosure. Filing for a Chapter 13 bankruptcy in Colorado can allow you to pay your past-due debt over a 3 to 5-year period, rather than all upfront.
This is an option best-discussed with a legal expert with a great deal of experience, as well as the resources to challenge large banks, which often are more interested in their bottom dollar rather than keeping people in their homes.
The Journal's report indicates that there were nearly 40,000 foreclosure filings last year - or one for every 56 housing properties in the state.
That's a staggering figure.
Perhaps more encouraging is that in December, there were roughly 3,500 foreclosure filings, or an average of 1 property for every 620 - a 7 percent decline from November.
Nationally, the numbers appear to be falling at a faster clip. The Journal reported that there were 1.9 million properties foreclosed on across the country last year, representing a 34 percent drop from the year before and the lowest number of filings in five years.
But as RealtyTrac's CEO told the Journal's reporter, the dip in foreclosures likely has more to do with legal entanglements than an improved economy.
“Foreclosures were in full delay mode in 2011, resulting in a dramatic drop in foreclosure activity for the year,” Moore told the publication.
He added that a lack of clarity with regard to much of the documentation, as well as legal issues that plague the foreclosure industry, means that the entire process is dysfunctional and inefficient.
A recent story on MSNBC detailed how foreclosures in Colorado and throughout the country are churned out using less-than-upstanding tactics by some of the country's largest banks.
Colorado foreclosure attorneys read with interest this exclusive piece. It allowed an inside look at so-called "foreclosure factories" which provides a greater understanding of the process and underscores why it's so important to have a skilled Colorado foreclosure attorney on your side in these matters.
A recent settlement by five of the largest banks and attorneys general from 49 states - including Colorado - granted $25 billion to alleviate the hardships caused by the real estate implosion resulting from unsavory tactics by financial institutions. A portion of that money is slated to go to individuals who were improperly foreclosed upon due to robosigning techniques and the banks not having the proper paperwork to ensure they even owned the property in question.
Part of that agreement was that they would alter their methods.
But this piece shows little has changed. At Wells-Fargo, which services nearly 18 percent of the nation's residential mortgages, entry-level staffers are given the title of "vice president" and told they need to keep a quota of how many foreclosures they need to process in a given day. The average number they are expected to produce in an 8-hour shift is 10.
This is concerning because if you are currently in the midst of fighting a Colorado foreclosure, you know that the process involves an inordinate amount of paperwork. These "vice presidents" are made to sign off on statements swearing to have personal knowledge of certain facts of the case - facts that they are unlikely to know given the volume they churn out each day.
What's more, employees of the bank, speaking on the condition of anonymity, have said borrowers who were seeking help in the form of loan modifications had sent reams of personal financial documents to the bank. Problem was, they were sent to fax machines that went weeks without being checked.
In some cases, the foreclosure process was kick-started when borrowers fell behind on miniscule payment amounts - sometimes as little as $2 on the interest.
Having an experienced Colorado foreclosure attorney walk you through the process is critical, given the type of practices that are continuing at these large banks.
Recent media reports indicating that Colorado foreclosures are on the decline don't tell the whole story.
Colorado foreclosure attorneys know there is much more to it, and many families continue to suffer as the result of greedy banks and careless politicians.
According to a story by Reporter Heather Draper of the , the urban counties in Colorado have seen a dip in the numbers of foreclosure sales and filings this past January, as compared to a year ago.
Draper cites the new figures released by the state's division of housing, which reports that foreclosure filings have dropped nearly 30 percent since last year, from 2,699 in January 2011 to 1,939 this January. She also cites foreclosure auction sales, which dipped from 1,499 last January to 1,150 this January.
While all this might be true - and encouraging if it continues on this same slope - we must remember that this report is only comparing two, 30-day time frames. A 23 to 30 percent decrease sounds like a lot, but we're not talking about this in terms of an entire year.
In truth, the housing crisis in which this country finds itself embroiled is far from over. And what many homeowners might not realize is that filing for bankruptcy can actually help by allowing the opportunity to shed their second and third mortgages on homes that are underwater anyway. Filing for bankruptcy will also halt the foreclosure process, and potentially give you and your family the opportunity to stay in your home, at least temporarily, until you can work with an attorney to determine the next step.
One misconception people have is that they have to be current on their mortgage payments in order to keep their home. This is not always true. A Colorado foreclosure attorney can help you sort through the legal mess.
According to the Journal, all counties except Broomfield showed a decrease in foreclosure auction sales. It's important to note, however, that some of those counties saw only minimal slides, like Mesa County which reported a 2.5 percent decline. A percentage like that is within the margin of error, and therefore not definitive enough to say whether things are actually improving or not.
Foreclosure can be a complicated process, but with the help of an experienced attorney, it can be far less stressful.
Colorado Springs foreclosure lawyers know that many people fell victim to the housing market implosion, whereby home values were grossly inflated, as were the homebuyers' suitability for the loans to obtain them.
However, it appears the negligence might not have ended there, as evidenced by a class action lawsuit filed on behalf of homeowners throughout the country alleging major banks were complicit in the Libor manipulation rate.
You may be familiar with Libor rate after countless entities including local governments and community banks all filed suit against some of the major banks following the scandal. Libor is short for the "London Interbank Offered Rate," and it is a collection of rates that is set for 10 currencies across 15 different time zones for a range of time periods. It could be for a particular day or it could be set for a year. Essentially, it's intended to measure the cost of borrowing among the world's largest financial institutions, which trade tens of billions of dollars in loans and hundreds of trillions in derivatives.
This past summer, Barclay's, one of Britain's largest banks, was accused of manipulating that rate. The bank reached a settlement of more than $450 million, and other settlements involving large U.S. banks are in the works.
So how does this affect homeowners? The Libor rate is the basis for which many of these banks set their interest rates for various loans. The lawsuit contends that nearly 1 million American homeowners were affected by inflated interest rates that were spiked due to the Libor rate manipulation. Banks reportedly earned hundreds of millions of dollars, if not billions, from the fraud, according to plaintiff attorneys.
On average, this resulted in about $300 extra a year in interest.
This doesn't sound like much, but it's certainly not helping. Plus, the bigger issue is that it shows the kind of tactics you are up against when you're trying to fight a Colorado Springs foreclosure.
Our Colorado Springs foreclosure attorneys are experienced in battling with big banks to have interest rates and principal payments reduced so that you can stay in your home. If you are trying to fight off foreclosure in Colorado, call us today.
Whether you're struggling to make mortgage payments or seriously behind, foreclosure is a scary proposition. Not only would this be devastating to your lifestyle, but you may be concerned about its impact on your credit. But isn't every major financial problem going to damage your credit? When it comes to your FICO score, is it much different to go through foreclosure or bankruptcy, complete a short-sale, or request a loan modification from your bank?
While it may seem to be a minor, there is actually a significant difference between these options. Before you decide what to do, find out which activity will have the greatest impact on your credit score.
Your credit score
Every person is assigned a number by a credit scoring company that predicts your likelihood of default on payment obligations. This number is called a FICO score. Each credit reporting agency uses a different set of factors and calculations to get to this score, but most of the information they use is contained within your credit report. For this reason, it is very important to look at your credit report often, just in case there are any errors in reporting.
A FICO is required in 90 percent of all mortgage applications, so it is a number that could impact both your buying power and interest rate.
What influences your FICO score?
Payment history accounts for 35% of this score, which means if you pay your bills late your number will be lower. The more recent the problem, the more it will affect your score.
Outstanding debt accounts for 30 percent. If the amount you owe to a creditor is close to the credit limit, this will negatively impact your credit score. Also, carrying a balance on several accounts will reduce your score because it will seem like you are overextended.
Length of credit history accounts for 15 percent, which means the longer you've had an account open, the better it is for your score. However, new credit (10 percent) shows you've been applying for many new credit limits, which could negatively impact your score.
Finally, the type of credit you have will account for 10 percent. FICO looks for a healthy mix, including both revolving and installment loans, but this will only be important when there is little information available to determine your score.
What happens when you file for bankruptcy?
A bankruptcy filing will show up on your credit report for 10 years, which is three years longer than most other negative information, such as short-sales, foreclosures and loan modifications.
The impact of foreclosure on your credit score
If your credit score is high to begin with, any kind of financial distress will cause a deeper dive than if your score was already low. In fact, borrowers with higher FICO scores could see a drop of 100 or more points. Additionally, it will take longer to get back to an original score if that score is high, but the number of years it takes to rebuild will largely depend on your future payment history and debt load.
If you have excellent payment behavior and your available credit increases, your score will improve more quickly than if you continue to make some late payments and are remain overextended.
Foreclosure, bankruptcy and short-sale often impact borrowers' scores so dramatically because borrowers only resort to these measures when they are seriously delinquent.
What about loan modifications and forbearances?
If your lender reports that you are "paying under a partial agreement," this could have a negative impact on your FICO score, but a lot depends on how your loan modification is reported. Either way, if you are no longer paying your mortgage as originally agreed, it will have some impact on your score.
Bankruptcy is worse for your credit score
Statistics from FICO indicate that bankruptcy is slightly worse for your credit score than foreclosure, forbearance, short-sale, or a loan modification. When comparing foreclosure to short-sale, borrowers who faced foreclosure took longer to rebuild credit than those who completed a short-sale. This can be attributed to the fact that foreclosure is normally triggered by such life events as a job loss, divorce or medical problem, conditions which will likely continue long after the foreclosure.
Keep in mind, however, that these statistics reflect the average situation, and everyone's financial situation is different. ¬¬
Photo Courtesy of Stuart Miles / FreeDigitalPhotos.net
In this financially turbulent time, many Americans have found themselves facing foreclosure. It’s not an altogether strange story… Being able to make a mortgage payment is getting harder and harder as more people lose their jobs.
It only takes getting behind on one payment, and then before you know it, you can be paying huge amounts of interest. Creditors want to you owe them as much money as possible, which is why they entice you into vehicles, property, or other goods that would normally be beyond your means.
It may have seemed like a miracle that a credit company was willing to loan you the money to buy a great new house, but there was nothing miraculous about it. For them, it’s a win-win proposition. If you pay the money back, then it’s no problem for them. But if you fail to pay on time, they’ll just keep taking and taking until you have nothing left.
That’s why filing for bankruptcy is such an important part of your rights as an American. If you’ve bought a house beyond your means, or if you’ve suffered a bad turn of luck, you may be facing foreclosure. If your house is foreclosed, you may have nowhere else to go, but the credit companies don’t care. That’s not their problem.
If you file for bankruptcy any time before the foreclosure sale date, your property can be protected under bankruptcy law, and in most cases, you can even just keep the house!