Underwater mortgage in Colorado

[snowbaby]

I am 30% underwater on my fannie mae mortgage in Colorado. I can make the payments but I live month to month with no room for extras or saving. I also don't believe that my condo will recoup. I am almost 60 years old. I have purchased another condo and will save $500 per month on payments. I want to walk away from the first condo. What are my options?

[Evan Bedard]

I am 30% underwater on my fannie mae mortgage in Colorado. I can make the payments but I live month to month with no room for extras or saving. I also don't believe that my condo will recoup. I am almost 60 years old. I have purchased another condo and will save $500 per month on payments. I want to walk away from the first condo. What are my options?

Welcome and thanks for joining the forum Snowbaby.

What you are doing here is referred to as "buy and bail" and we have many members here who have pursued the same route and purchased a new property before defaulting on their home. If you type in "buy and bail" in the google search bar at the top of the page you will find discussions on this topic. Did you already vacate the condo and move into the new property?

[snowbaby]

No, I have not. Do you have any words of wisdom for me? I could use some guidance if what to do.

[Evan Bedard]

You can check your original loan documents to see if it contains a "power of sale clause" which will then make the property undergo the non-judicial foreclosure process instead of judicial..

Also here is a good article written by a local attorney that explains the foreclosure process and deficiency judgements in your state. Colorado does allow deficiency judgements and if one happened to be filed against you once you vacate this property you may have to resort to BK to eliminate the debt..

Of course you can always to to pursue a short sale or DIL under the HAFA program that will automatically force the lender to waive their rights to the deficiency.. But you will be required to send in your financial information and if you are not approved for the program they may be able to use your financials against you later when attempting to collect on the debt..

Colorado Foreclosure Defense ? Deficiency Judgments Revisited « MarkHofgardLaw

Judicial Foreclosure


The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.

Non-Judicial Foreclosure


The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".

[Cat Damiano]

No, I have not. Do you have any words of wisdom for me? I could use some guidance if what to do.

Welcome to the forum and thank you for joining............

In CO, whichever route you take, be sure to continue to keep up with your HOA dues due to the fact that in CO these become what is called "super liens".

HOA Super Liens by Janeen R. Hill, Esq. and Jonathan A. Goodman, Esq.


You should arm yourself with as much information as you can, and some of the attorneys in the following represent lenders in some cases so their information in regards to deficiency comes directly from the steps that lenders may be taking in CO as that is the only state that I can speak to by attending the seminars of this firm and working with their knowledge and expertise when helping clients.

Deficiency Suit Overview: What Happens to Debt Secured by Real Estate After A Foreclosure (or Short Sale)? Frascona Joiner

Considerations Before Walking Away From a Mortgage - Short Sale - Loan Modification Colorado


Colorado Foreclosure Attorney, Colorado Foreclosure Lawyer