With about 4,743 active foreclosures on its books in March 2007, Colorado is near the top of the national list when it comes to homeowners defaulting on their mortgages.

To help distressed homeowners in the Centennial State keep their homes, the Colorado Division of Housing established a foreclosure hotline in December 2006 that offers free advice and counseling.

And, according to a recent article from the Denver Business Journal, at least four out of five people who have called [the hotline] over the past five months have avoided foreclosure.

Here’s a snip:

“Specifically, 7 percent of callers who received counseling later lost their homes to foreclosure. Another 12 percent may have lost their homes, but this group includes people in bankruptcy, people who could not later be located, and people who later chose to work with for-profit foreclosure consultants, officials said.

Twenty-two percent of callers sold their home before foreclosure, 15 percent initiated a repayment plan, 13 percent modified their mortgage, 6 percent brought their mortgage current and 5 percent deeded the property to the lender.”

The Colorado foreclosure hotline, which connects nonprofit counseling agencies across Colorado to callers trying to avoid foreclosure, can be reached at 1-877-601-HOPE.

There are some helpful tips today in the Orange County Register for homeowners who are searching for ways to catch up on their mortgage payments and to avoid foreclosure.

Here’s the quick list:

• Talk to your lender as soon as possible
• Get financial counseling
• Consider selling before foreclosure is final

The overriding theme of the article, which was written with the help of industry experts, is to act fast.

We couldn’t agree more — the quicker a distressed homeowner reaches out for assistance, the more options he or she will have from which to choose.

And, if for some reason a resolution cannot be agreed upon to save the home, at least these homeowners will have more time to put their properties on the market with the hopes that buyers come along to bail them out.

Filing for bankruptcy is the absolute last option, as well as one of the worst.

Consider this:

“Filing for bankruptcy isn’t a good option. Bankruptcy will not only ruin your credit but, depending on whether you file Chapter 7 or Chapter 11, the lender may still be able to foreclose or the court may order the sale of your home.”

The article also touches on a non-conventional strategy called the short sale. Essentially, this means that the house is sold for less than the actual loan amount.

However, the lender must agree to the terms of the price beforehand and be willing to accept the discounted offer.

Lenders sometimes do this to keep foreclosures off their books and to ensure that more money is not lost while the home is wasting away on the market.

In short, when it comes to foreclosure there’s no silver bullet solution that cures all situations. Fortunately, there are programs, services and options available that help distressed homeowners keep the keys to their front doors.

Therefore, always remember that it is often a race against the clock — give yourself the time you need to arrive at the resolution that best fits your needs.

With more than 91,000 New Yorkers in danger of losing their homes to foreclosure by the end of 2008, Sen. Charles Schumer (D-N.Y.) is looking to put an end to the subprime loans that are causing the problems, according to a recent article on NYDailyNews.com.

In fact, an analysis by his office revealed that an estimated 1.8 million American families — including nearly 23,000 in New York City and 19,000 in Nassau and Suffolk counties — could face foreclosure within the next two years when their subprime loan rates increase.

Here’s a snip from Chuck:

“For thousands, the American dream of homeownership has turned into an un-American nightmare. Thousands of middle-income and lower-income New Yorkers were tricked into borrowing these loans, and they are loans designed to fail. The first step is making sure that borrowers are protected from these usurious lenders. It’s long past time that we ensure that American families are protected from loans that promise them the world and then bury them in debt.”

To address the problem, Schumer recommends a response on the federal level that includes:

• establishing a national regulatory system to target “rogue” mortgage lenders and brokers;
• eliminating “liar loans” by creating a suitability standard for borrowers;
• prohibiting prepayment penalties, stated-income loans and “pick a payment” gimmicks that coerce borrowers into signing higher loans than they cannot afford; and
• creating a state foreclosure prevention task force.

It’s important to note that bad loans are not the only factors that contribute to foreclosure increases. Illness, divorce, job loss and other personal issues often affect distressed homeowners and cause them to fall behind on mortgage payments.

Furthermore, not all subprime loans result in foreclosure.

Therefore, it’ll be interesting to see how the interests of homebuyers and lenders are both represented if and when tighter restrictions are implemented.

Stay tuned.

Carol Gilbert from the Goldseker Foundation has some great advice for distressed homeowners in Maryland, anywhere for that matter, in an article today in the Los Angeles Times.

Here’s a quote:

“Borrowers may think that they are delaying foreclosure by not calling the lender – the opposite is true. The longer a borrower waits, the faster foreclosure will proceed and the fewer options there are to slow or reverse it from happening.

Too often, homeowners who default on their mortgages wait until the last minute to seek foreclosure assistance. It’s a decision that in the long run comes back to haunt them.

In most cases, lenders, states and nonprofit organizations have programs in place that can stop foreclosure. That’s because no one, aside from opportunistic investors, ever really wins in foreclosure situations.

According to the article, one of the first steps to take is contacting a housing counselor. Reaching out to the lender to discuss possible options is also an important initial step.

The article offers a few resources for Maryland residents, including:

• Dial 311 (in Baltimore) to be connected to a free counselor at a HUD-approved nonprofit
• Call 888-995-HOPE (4673).
• Visit the St. Ambrose Housing Aid Center ((410) 366-8550) for free counseling

Whether it’s refinancing, deferring payments or relocating, options abound when it comes to avoiding bank repossession.

Inaction, however, should not be one of them.

Foreclosures in Detroit, Michigan ”primarily in Wayne County” are consistently among the tops in the nation.

It’s a slice of the real estate market that did not experience the highs of the real estate boom during the last few years, which is perhaps the reason distressed homes in the Motor City are now selling for less than cars, according to a recent Reuters article on FOXNews.com.

Here’s a snip:

… With bidding stalled on some of the least desirable residences in Detroit’s collapsing housing market, even the fast-talking auctioneer was feeling the stress.

‘Folks, the ground underneath the house goes with it. You do know that, right?’ he offered.

After selling house after house in the Motor City for less than the $29,000 it costs to buy the average new car, the auctioneer tried a new line: ‘The lumber in the house is worth more than that!’

Clearly, the foreclosure situation is bad news for affected homeowners. However, it also represents tremendous opportunities for investors to swoop in and purchase properties at rock bottom prices.

Not all properties, however, come dirt cheap. In fact, Mayor Kwame Kilpatrick recently announced that two condominiums in the city’s revitalizing downtown sold for more than $1 million each.

The key to success in a reeling city like Detroit, where the only way to go is up, is being able to weather the storm and hold onto the property long enough to realize a profit.

It could be months or years. Regardless, it’s a decision that could pay huge dividends if and when the situation sorts itself out down the line.