Monday, August 3, 2009

CBS4 piece on new foreclosure laws

This is based on a TV piece:

Jul 31, 2009 5:06 pm US/Mountain
New Foreclosure Law Offers Homeowners Relief
Written for the Web by CBS4 Special Projects Producer Libby Smith
Michelle Griego

...Starting on August 1st, homeowners facing foreclosure will get letters in the mail informing them of a new law that could give them an extra 90-days to save their homes.

"Provides potentially a 90-day deferment, that is an additional 90-days for someone during which they can do some negotiation and some workout for their loan," said Ryan McMaken, spokesperson for the Colorado Division of Housing.

The law is designed to help those homeowners who can still make some payment on their mortgage even if it's not the full amount.

"This probably isn't going to be a program for people who have no income at all or they have such greatly diminished income that they can't make that two-thirds payment," McMaken added.

Those who get the notice that they're eligible will then be instructed to call the Colorado Foreclosure Hotline. Call agents will hook them up with housing counselors and the counselors will decide if they're qualified. The law spells out very specific qualifications to get the extra 90-days. Those include:

There are some other stipulations as well.

"What they're really looking to do is work towards a loan modification of sorts with the mortgage company so they can reduce their payments to a reasonable amount compared to their income now," said Shannon Peer, Director of Housing Counseling at Brothers Redevelopment, Inc.

Brothers Redevelopment, Inc. is one of the 27 housing agencies partnered for the Colorado Foreclosure Hotline. As calls come into the hotline, Peer has seen the foreclosure crisis change in Colorado.

"Back in November - December, early December, we started to see a lot more unemployment or under employment clients reaching out for help," Peer explained.

Call agents used to field calls from people struggling under bad mortgages, now they're taking about 2,000 calls a month from people who can no longer pay their mortgage because of the economy. This new law is another tool the housing counselors can use to help homeowners hold on to their homes...