Succors For Foreclosure Victims Delayed
Reforms were aimed to give defaulting house owners to catch up. The plan was to extend the time of grace from 60 to 125 days so that the borrower who was lagging behind could get a breather. The scheme, passed in 2006, was to take off this month. But due to the failure of the concerned officials the plan has been shelved.
Bob Saqel, Colorado Public Trustee Association’s legal committee’s chairman, admitted that they had initiated the delay. They were not ready to manage the change. There were software related problems as well as complications about turnover.
Another reason was that not all among those who had initiated the move survived the November elections. The new Governor, Bill Ritter, appointed a fresh lot of public trustees in the beginning of 2007.
Sagel, who is also the public trustee for Morgan County said that he himself was not ready to chalk out and start executing the plan. Many others were in the same boat.
Under the current practice, a house owner in Colorado has about 45 to 60 days time to clear the dues. Otherwise the property would be sold in a public trustee auction to the highest bidder. Usually the lender buys the property and gives the previous owner another 75 days to pay off the loan.
Zachary Urban, the Director of Housing Counseling with Brothers Redevelopment in Denver, contends that it was a misnomer from the beginning. Redemption entails payment of additional costs over and above clearing the balance dues in its entirety. Only a miniscule of the borrowers could perform this miracle.
Sagel added that the Public Trustees reported that 29,000 foreclosures had been initiated in 2006. There had been only 199 redemptions.
In 2006 the state legislators decided to extend the grace period. In return for doing away with the redemption period the idea was to get current on late payments. Urban was of the opinion that getting more time would be beneficial to both the parties – the lender and the borrower. Nobody wanted people dispossessed.
After the sale of the properties by public trustees, the ex-owners move out. The properties remain vacant in a legal limbo for about another two months. It confuses. On the one hand the property is said to have been sold and on the other it is being said that two months time is at hand.
