Colorado Springs Foreclosures

Loan servicers are seeing the possible terms of a settlement with the government over the robo-signing investigation. A 27 page document / federal proposal was posted on the American Banker's site . The document is just a proposal and will be negotiated but already I see some glaring problems.

First, lets all agree that vacant distressed properties are a blight on the community in Colorado Springs that they reside in. Second, understand that distressed properties account for about 20% - 30% of the transactions on any given month in El Paso and teller County (the Pikes Peak Region). Short sales and loan modifications can take many months to complete, many take over 7 months, and often the homes are vacant, the owners have moved on, and they have no pride of ownership in the home.

In the federal proposal servicers are not allowed to start foreclosures proceedings while a loan modification is in process. Fine, I have seen first hand here in Colorado Springs, CO where home owners thought they were working on a loan modification and in the meantime their home was foreclosed on. Not only were they shocked and not prepared for a move, but they missed the opportunity to do a short sale because they were focused on a loan modification. The proposal also states that the loan servicer shall be responsible to make sure vacant, REO, and charged off properties do not become blighted.

I can tell you that the most blighted homes I see in Colorado Springs, CO and Peyton, CO are short sales, not REO properties. Banks take steps to do property preservation as soon as they get possession of the home. I am required by my bank clients to make sure the property has utilities on, the property is winterized, there are no safety or health hazards, no debris, and the lawn is cared for. Who is responsible for the home valuation of all the homes that are vacant and abandoned but working on a loan modification or short sale. If banks are not allowed to start foreclosure proceedings the homes will just sit there vacant. If they are trying a short sale there might be a Realtor involved who may try to at least winterize the home. I can't tell you how many homes in Colorado Springs get water damage because the heat is shut off on a home but the water is not. Many short sale clients don't have the money or won't spend the money to keep utilities on or winterize the home. Often they leave debris in the home and don't care for the yard.

If you are working on a loan modification but not living in the home you should be responsible to make sure the home is not a blight. If you are not then the loan servicer should be allowed to start foreclosure proceedings immediately in the interest of preserving the asset and helping the community the home is in.

Bank Owned Homes

Why use a 'Buyer's Agent' to help you purchase your next home in the Colorado Springs area? When my father was selling real estate in Colorado Springs, the idea of buyer's agency was very different than today. Certainly when my grandfather was selling real estate in Colorado Springs these ideas were completely different.

You or your parents may have purchased a home this way: Drive around, see a house you like and call the number on the yard sign. Then you work with the agent that was marketing that home for sale and buy the house. Think of this - the agent who you worked with was working for the seller, not for you. Today the state of Colorado prefers that buyers, especially buyers without a lot of experience buying real estate, use a 'Buyer's Agent' to help them. The key here is Fiduciary Responsibility. Here is a paragraph straight out of Colorado's REO Real Estate forms that defines a agent of the Buyer:

"A buyers agent works solely on behalf of the buyer to promote the interests of the buyer with the utmost good faith, loyalty and fidelity. The agent negotiates on behalf of and acts as an advocate for the buyer."

Think of it like going to court with a lawyer of your own versus using the other party's lawyer to handle everything. Most of the time you would want your own lawyer. The best part is that a buyer's agent's fee is most often paid by the seller. So, next time you think of buying foreclosued homes in Colorado Springs, regardless if it is a short sale, foreclosure, raw land new construction or townhome, use a buyer's agent and get free representation.

Real estate deals are very complex, and it can be a tremendous help to have your own agent. Being a licensed agent in the state of Colorado means you have to adhere to a certain professional standards. If the agent of your buyer does not act as your advocate or does some other mis-deed, you can file a complaint with the Colorado Department of Regulatory Agencies (DORA) or with any of the Realtor association to that agent belongs to. In Colorado Springs that would be the Pikes Peak Association of Realtors. Here is a link to the DORA web site to file a complaint, look for the link on the right that says file a complaint http://www.dora.state.co.us/

Hopefully you will never have to file a complaint against me or any of my colleagues, but it's important for home buyer's in Colorado Springs, CO to understand the duties and responsibilities of a buyer's agent so that the industry as a whole becomes better understood and respected. When a buyer find adequate representation they will have a better home buying experience and that is the most important thing.