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New Colorado program aims to help homeowners stop foreclosure

Colorado residents struggling to stop foreclosure may feel they have very limited options. However, the feelings of frustration should not stop homeowners from taking action as soon as possible, whether by filing for bankruptcy or pursuing other options.

For some Colorado residents struggling to stop foreclosure, a new loan program may provide some assistance. Earlier this year, a multi-state foreclosure settlement was put in place that gave states significant money to handle. Colorado was one of the first states to determine how to use these funds, as it decided to put all the funds toward preserving affordable housing.

The program is open to struggling homeowners who have a temporary financial hardship that renders them unable to make mortgage payments. Those who want assistance must show they will be able to continue making mortgage payments after catching up on the past due payments.

If homeowners meet these qualifications, they can receive up to $10,000 to help with late payments. What's more, these sums are interest-free and do not need to be repaid until the house is sold or refinanced.

Hopefully, the program will hope some Colorado residents stay in their homes. For many, however, other means may be needed to stop foreclosure.

Fortunately, several options are available, including working out plans with lenders and filing for bankruptcy. Under the latter option, homeowners can delay foreclosure proceedings that are already underway, as the automatic stay in bankruptcy stops all collection activities. Some may then be able to save up enough to become current on mortgage payments, similar to the state program discussed above.

Source: KREX TV, "Mortgage program offers relief to delinquent home owners," Cori Coffin, Dec. 31, 2012

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