Lawmakers in Colorado just announced their plans to provide a 90-day or three-month moratorium to homeowners who are facing foreclosure threats. Headed by Gov. Bill Ritter, state leaders also announced that Countrywide Financial Corporation will provide million to help the state in assisting homeowners who might have foreclosed properties.
This fund will be used to prevent and solve Colorado foreclosures. Around 7,000 homeowners are expected to benefit from this fund, through option-ARM loans and modifications on subprime loans. Through this rescue fund, borrowers may experience low interest rates of up to 3.5 percent for up to five years.
Rep. Mark Ferrandino authored the proposal of having a 90-day moratorium on foreclosures. This moratorium will only be given to qualified homeowners, or those who have good records on paying their debts and those who have good financial situations. Upon receiving a foreclosure notice, a person should immediately get with a Housing and Urban Development-certified counselor to get assistance on their financial situation and how they can go about it.
The counselor would then decide if the owner is indeed capable of paying their mortgage in the future. If a homeowner is considered as a good candidate, he or she will have an additional 90 days to look for a solution to prevent having foreclosed homes.
This proposal, however, got neutral opinions from other banking and financial institutions. The Colorado Bankers Association, for instance, said that it is neither in support nor is it opposing the proposal. According to its chief executive officer Don A. Childears, it is best to allow the market to heal and bring balance to the housing industry.
On the other hand, Gov. Ritter stands firm in his decision to provide solutions to alleviate and reduce Colorado foreclosures. He is supported by other state representatives, such as Sen. Morgan Carroll, who says that 78 percent of homes in nearby states are also facing the risk of foreclosure. Colorado leaders continue to express the need to take action on the current situation, since foreclosures have effects beyond the individual homeowner, but also to the whole community, and the country as a whole.