Free help: HUD-approved housing counselors, the public trustee, and what to ask

Bottom line first. You do not have to pay a stranger to deal with a foreclosure. Three kinds of help cost little or nothing: a nonprofit housing counselor, the people your lender must name to talk to you, and the county public trustee's office. Call early. Dates depend on your notices, so keep every letter.

Help number 1: a housing counselor

A housing counselor is a trained person at a nonprofit who helps homeowners understand their options, build a budget and talk to the lender. The federal housing department, HUD, keeps a list of counselors who meet its program rules. Counseling through these agencies is generally free or low cost. This course is not connected to any agency. To find a counselor, use the contact information in your foreclosure letters, or ask the public trustee or your local housing office where to start. No phone number or website is given here because none can be verified from the law.

The law points you to the state's foreclosure hotline. At least 30 days before the lender files its notice of election and demand, and at least 30 days after you default, the lender or its servicer must mail a notice to the original borrower at the address on the deed of trust and, if different, the last address in its records (C.R.S. 38-38-102.5(2)). The notice must contain:

• the telephone number of the Colorado foreclosure hotline;
• the direct number for the lender's loss mitigation representative or department (the people who work out ways to avoid foreclosure);
• a statement that under another Colorado law it is illegal for a foreclosure consultant to charge an up-front fee or deposit for services related to the foreclosure (C.R.S. 38-38-102.5(2)(c)).

This notice applies only when the default is solely missed payments (C.R.S. 38-38-102.5(3)(a)). Look for it in your mail. The hotline number is printed there; the statute text itself does not list it.

Help number 2: your single point of contact

No later than the 45th day of your delinquency, a loan servicer (the company that collects your payment) must set up a single point of contact, one named way to reach the right person, and give you in writing a direct means of communication (C.R.S. 38-38-103.1(1)). That person must tell you accurately about the loss mitigation options, what you must send to be evaluated, the status of your application, when the servicer may refer your loan to foreclosure, and the deadlines. The person must also be able to pull your payment history and the papers you sent, and explain how to file a notice of error or an information request (C.R.S. 38-38-103.1(2)). A servicer that has 5,000 or fewer mortgage loans, all of which it or an affiliate owns, is exempt (C.R.S. 38-38-103.1(3)).

Help number 3: the public trustee

The public trustee is the county office that runs most foreclosure sales. Its staff cannot give legal advice or take sides, but they can tell you the sale date and what has been filed. After the foreclosure starts, the public trustee mails a combined notice to the people on the mailing list. The first is no more than 20 calendar days after the notice of election and demand is recorded (C.R.S. 38-38-103(1)(a)). The second goes out between 45 and 60 calendar days before the first scheduled sale date (C.R.S. 38-38-103(1)(b)).

That notice tells you three things worth circling:

• A notice of intent to cure must be filed with the officer at least 15 calendar days before the first scheduled sale date or any later date it is continued to (C.R.S. 38-38-103(4)(a)(II)). Cure means catching up on what you owe. If the sale date moves, the deadline can move too (C.R.S. 38-38-103(4)(a)(II.5)).
• A notice of intent to redeem must be filed with the officer no later than eight business days after the sale (C.R.S. 38-38-103(4)(a)(III)).
• If you think the servicer broke the single-point-of-contact rule or the ban on dual tracking (pushing foreclosure while you are being reviewed for help), you may complain to the Colorado attorney general, the federal Consumer Financial Protection Bureau (CFPB), or both. The notice must include contact information for both. Filing a complaint does not stop the foreclosure (C.R.S. 38-38-103(4)(a)(IX)).

Legal aid

Legal aid groups are nonprofit law offices that help people with low income at no cost. Many take housing cases, but each has its own income limits and waiting times. A public trustee or housing counselor can usually tell you which one covers your county. A lawyer, not a counselor, is the one to ask about bankruptcy or whether you have a defense.

What to bring and what to ask

Bring:

1. Every letter and notice about the loan, in date order.
2. Your recent mortgage statements and your loan paperwork.
3. Pay stubs or proof of other income, and your recent bank statements.
4. A list of monthly bills (see the example below).
5. Any papers from a court or the public trustee.

Ask:

1. What is my exact sale date, and what is the deadline to cure?
2. Who is my single point of contact, and how do I reach them?
3. What do I need to send to be evaluated for loss mitigation, and by when?
4. What is the status of my application?
5. Will anything I send pause the foreclosure? Get the answer in writing.
6. Are you charging me anything, and why?

Walk away from anyone who asks for an up-front fee or deposit to "save" your home. Colorado law says foreclosure consultants cannot charge one. Also do not sign over your deed to anyone before talking with a counselor or lawyer.

Example with real numbers

Dana and Luis took a pay cut. Their take-home pay is now $4,300 a month. They bring this budget to a counselor:

Item	Per month
Mortgage payment	$1,650
Utilities	$320
Groceries	$700
Car payment	$380
Car insurance	$140
Gas	$200
Phones	$110
Child care	$600
Medical	$150
Everything else	$250

1. Add the costs: 1,650 + 320 + 700 + 380 + 140 + 200 + 110 + 600 + 150 + 250 = $4,500.
2. Income minus costs: $4,300 - $4,500 = -$200. They are $200 short every month.
3. They have missed three payments: 3 x $1,650 = $4,950 behind.

Now the counselor and the single point of contact can work from real numbers. The counselor can look for ways to close the $200 gap, and the family can ask the servicer what it needs to review them for a plan that also covers the $4,950. Nobody can help with a gap they cannot see.

This is general education, not legal advice.