Colorado Foreclosure Listings to Decline, Wishful Thinking?

Colorado Foreclosure Listings to Decline, Wishful Thinking?

Posted on August 7th, 2008 in Colorado by Alana

Residents of Colorado are hopeful that the bill signed by President George Bush would offer them the much anticipated break. With Colorado foreclosure listings on the rise, and Colorado being amongst states where the rate of foreclosures is high, the bill is to provide relief for local communities facing increasing foreclosures besides home owners getting relief on their mortgages.

A report by the El Paso County Trustees Office states that depending on how one would add things up, Colorado continued to stay part of the top 3 positions in lists of states with reference to the number of foreclosures. Foreclosures in El Paso, in comparison to the same time period last year, have gone up by 40%.

Among other benefits, the bill will provide incentives to lenders are willing to reduce existing loans of home owners facing problems by up to 10%. Not all home owners in the mortgage process will qualify though. Participation by lenders is not mandatory.

According to Tom Mowle, a public trustee with the El Paso County a singular foreclosure could constitute as a particular individual’s problem, but with communities, like the ones in Colorado Springs, where neighborhoods are facing foreclosures by the dozens, it becomes a collective problem. This, because the houses could end up staying empty for prolonged periods, along with prices in entire neighborhoods coming down.

With this in mind, the bill has also dedicated aid close to $4 billion for local communities which are suffering due to a large number of houses being foreclosed within the same neighborhoods. To help home owners work on refinancing their loans, $300 billion has been set aside. Freddie Mac and Fannie Mae are also to receive help with the Department of Treasury to provide monetary aid to them.

Colorado’s foreclosure hotline’s administrator, Zach Urban, points out that to qualify for the program, the debt to interest ratio of a borrower would have to be more than 31% in order for them to qualify. With participation of lenders made voluntary, the ball to reduce foreclosure listings in Colorado is in their court.

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