Wondering how to save your house from foreclosure

Fighting to save your house, afraid it's already lost.

Somewhere under every thought you've had tonight is the same hope: that a person exists with a lever big enough to stop what's coming for your home. A lawyer. An agency. Someone at the bank who will finally listen. I understand why you're scanning for a rescuer, because from inside it doesn't feel like the lever could be anywhere near your own hands. It feels like you may have lost and that you have no hope in keeping your home. So let me say the most important thing. There are real, legal ways you can still keep your home in this harsh situation you are in. Yes, the timing of your situation matters but the strongest options belong to you. Not to a stranger. To you. And you get to decide how this moves forward after I show you what each one is.

The relief that the price is smaller than you feared

The first way to save your house is the one most people assume is out of reach: catching the loan up. Colorado calls it curing, and the fear that kills this option early is the belief that the bank now demands the entire loan, the whole crushing balance, all at once. That is not what curing costs. The law is explicit that curing takes the missed payments plus the allowable fees and costs, not the full balance of your loan (CRS 38-38-104(2)(b)). The burden is not the entire loan even though it may have felt like that.

The steps themselves are concrete and the earlier you start them the better. You need to file a written notice of intent to cure with the public trustee no later than 15 calendar days before the foreclosure sale date (CRS 38-38-104(1)). Once you do, an itemized cure statement will contain the exact dollar amount required and will be provided to you directly. If you pay that amount to the public trustee by 12 noon the day before the sale, the foreclosure is withdrawn. Not paused. Withdrawn, and you and your home are safe and back to normal. I truly hope this option is available to you but I also know the money itself may be the entire problem, and if it is I see you but there are still options to make this work. I promise.

The hope that the loan bends before you do

The second way is for when catching up is simply not possible. If it’s not possible for you, I understand if that is painful but also know we can still get through this. From here, in the best case, the loan gets reworked to fit your circumstances. The industry calls this loss mitigation, and it exists by working with your servicer directly. There are plenty of keep-your-home options in loss mitigation and they exist precisely for someone in your position. So yes, there is still hope here.

Now the important part. You need to get your servicer a complete application more than 37 days before the foreclosure sale. Within 30 days they must evaluate you for every option available and tell you in writing what they will offer (12 CFR 1024.41(c)(1)). While that review is open, they cannot push the sale forward. Further, in specific Colorado law, if you get the servicer's written confirmation of a complete, on-time application into the public trustee's hands no later than 14 calendar days before the sale, then the sale is put on hold (CRS 38-38-103.2(3)). That delivery does not happen on its own and is something you have to do. But, if an option is offered, you accept it, and you keep up your end, the foreclosure doesn't just wait politely. The notice that started it has to be withdrawn and you have stopped the foreclosure.

One honest note, because I don’t want you to be blind sided. There is no rule that forces the servicer to grant any particular option of loss mitigation (12 CFR 1024.41(a)). They have to consider everything. They don't have to say yes to anything. I understand if that is disappointing but it’s important I tell you before you run into it on your own.

The brake you hope you never need

There is one more lever, and truthfully it’s a scary one and probably not something you would like to hear. You always have the option to file for bankruptcy. If it hurts reading that I can only imagine. However, filing bankruptcy triggers an automatic stay, a federal stop that halts foreclosure activity the moment the petition is filed, including a sale that is already scheduled (11 U.S.C. 362(a)). For some families this break is the thing that saved the house. For others, this can’t possibly be an option. However this lands for you is what is right so don’t be concerned if you deeply oppose the option. All I will say, if you do go down the bankruptcy path many people use an attorney to help make this tough and complex decision. I hope you never need it but you still deserve to know it exists.

A save option that doesn’t feel like one

If nothing above is possible for you and it feels inevitable that you are going to foreclosure, I’m sorry. In this scenario, this may not feel right but it is still important for me to say, selling beforehand is an option. Honestly, avoiding foreclosure is almost always better for you. Better for your credit and your money and should be at minimum something you consider. I understand if this isn’t what you want to hear and you can absolutely dismiss this. But many people don’t know you can sell your home up until the day of your auction without approval needed from your bank as long as you have enough equity. If you don’t, here is what you can do instead. Either way, we at Transitus are here to help you see what options are available to you.

People in your corner who charge you nothing

Every path above goes better with more days on the clock and someone beside you. HUD-approved housing counselors provide foreclosure prevention counseling completely free, 24 hours a day, through the HOPE Hotline at (888) 995-4673. The Consumer Financial Protection Bureau’s own guidance for a homeowner who can't pay is simple: call your servicer right away. I'll be honest with you, a counselor cannot promise you will keep your home, and neither can anyone else. What they can do is sit on your side of the table while you pull the levers that are yours.

Still yours to fight for

You came here searching for someone with the power to save your house, and it turns out you've been carrying that person up the stairs every night. That is heavier than the rescue you wanted. It is also stronger. This house has someone fighting for it. It always did. I hope this has helped you get through this tough period of your life in even the smallest of ways. Good luck and we at Transitus are here to support in any way we can if you need it.

This article is general information from Transitus, not legal, financial, or tax advice. Foreclosure rules change and every situation is different. Transitus is not a foreclosure consultant (CRS 6-1-1103) and charges no upfront fees. For free help, call the Colorado Foreclosure Hotline at 1-877-601-HOPE or consult a Colorado real estate attorney.