A bill that will impose a 90-day waiting period before mortgage lenders can foreclose on properties in default cleared the Senate this morning and is on the way to Gov. Bill Ritter's desk.
HB 1276, which was approved on a 26-8 vote, requires homeowners to contact a counselor certified by the U.S. Department of Housing and Urban Development within 20 days of receiving a notice of foreclosure. If the counselor determines, after an examination of the homeowner's finances, that he or she is eligible for participation in the 90-day delay program allowing for negotiation of loan changes.
If the counselor finds that the homeowner is a good candidate for loan modification, the 90-day delay in foreclosure in order to allow for such negotiations kicks in.
“Foreclosures are tearing apart many Colorado neighborhoods and communities,” Sen. Morgan Carroll, D-Aurora, and the Senate sponsor of the bill, said. “During these times of economic uncertainty, thousands of people in our state are falling behind on payments and losing their homes. This bill will help homeowners negotiate a solution, get back on track and, most importantly, keep families in their homes."
According to the state's Division of Housing, there were almost 40,000 foreclosure filings in Colorado in 2008.
The bill was sponsored in the House by Rep. Mark Ferrandino, D-Denver.