A new Colorado law delays foreclosures.

The law to prevent foreclosures in Colorado goes into effect August 1, 2009. The law will give homeowners more time to work with their lender to keep their home.

The new law’s main goal is to give lenders and borrowers more time to negotiate a mortgage loan modification that lowers monthly payments to an affordable level, based on the borrower’s income.

You will get a letter in the mail if your house is being foreclosed. The homeowner must be informed of the possibility of obtaining a foreclosure deferment from the lender and/or the Colorado Division of Housing. The notice will clearly tell the borrower to call the Colorado Foreclosure Hotline for further information, or the homeowner can contact a Colorado non-profit agency. The Colorado state hotline will help you figure out if you meet the full criteria for the assistance, and what the next steps are.

There are specific requirements that must be met in order to get an extension of 90 days. The family needs to currently live in the house, the loan amount must be less than $500,000, the borrower plans to keep living in the house, and it must be the primary mortgage on the property.

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