Hundreds, if not thousands, of Colorado homeowners who are behind on their home mortgage payments will get a borrowers’ time-out, thanks to Bank of America’s decision to freeze all foreclosure cases in its portfolio.
And if other banks follow Bank of America’s lead, many more Coloradans could get the same breather.
Exactly how many isn’t clear, though at least 7,500 foreclosures have been initiated in Colorado by GMAC, Wells Fargo and JPMorgan Chase. Bank of America is the nation’s largest lender and its mortgage portfolio grew even larger with its acquisition of Countrywide Financial a couple of years ago.
Today’s news will certainly affect those homeowners who received a Notice of Election and Demand – a notification filed by a lender through the public trustee’s office stating that a foreclosure action has been initiated — in August or September.
El Paso County Public Trustee Tom Mowle reported 377 foreclosure starts in September following 427 foreclosures initiated in August.
He said there have been 3,577 foreclosure starts so far this year through September, which is slightly less than a year ago.
“(Our) prior estimate of 4,800 starts for the year continues to be a good one; that total would be down 13 percent from last year but still the second highest total ever in El Paso County,” he said.
The Mortgage Bankers Association reported that the delinquency rate for residential mortgage loans of one to four units was 9.4 percent as of June 30.
In Colorado, 6.36 percent of the state’s 998,184 residential loans through the second quarter were deemed past due and subject to a foreclosure filing.
Among the 50 states and the District of Columbia, however, Colorado mortgage defaults are relatively low: the state ranked 42nd in delinquencies and 30th for foreclosures starts through the second quarter.
The foreclosure process in Colorado
In some states, banks must obtain a judge’s approval before foreclosing on a house. That’s not so in Colorado. Here’s a look at the process here: