How do I help a homeowner who is behind on their mortgage?

When an owner falls behind, they're scared and they usually wait too long to call anyone. Your job is to lay out the pre-foreclosure options in plain words, get them to free help, and show them what the house would sell for. You're not their lawyer and you're not their lender. Here's how I handle the first call, the Colorado timeline I teach, and how I compare keeping the home with selling it.

The short answer

Federal servicing rules generally keep a lender from starting foreclosure until the loan is more than 120 days late. In Colorado, foreclosure starts when the lender records a Notice of Election and Demand (NED) with the county public trustee. The sale is usually set about 110 to 125 days after that for a typical home. Until the sale, the owner may still catch up, get a repayment plan or modification, sell the home and keep any equity, or try a short sale. After the sale, Colorado owners generally have no right to buy it back. So the earlier they act, the more doors are open.

Step by step

Find the stage. How many payments are missed? Has a notice arrived? Is there a sale date? Write the dates down.
Send them to a free counselor first. HUD-approved housing counselors don't charge for foreclosure help and don't earn a commission. Use HUD's counselor search, the CFPB counselor finder, or Colorado Housing Connects.
Get the loss mitigation application in. Tell the owner to ask the servicer for it, fill in every page and get written confirmation that it's complete. Under federal rules, a complete application sent early enough can pause the sale while it's reviewed. Timing rules are explained at the CFPB help for homeowners page.
Find out what the home would sell for. Run a pricing report. Equity changes everything.
Lay out the options side by side. Use the table below.
Mark the cure deadline. In Colorado, an owner who wants to reinstate files a notice of intent to cure with the public trustee at least 15 calendar days before the sale. The county public trustee's office has the forms and the cure figure.
Push legal questions to an attorney. The court notice (a Rule 120 notice), deficiency risk and bankruptcy questions belong to a Colorado real estate attorney.
If selling, move fast. List, get a contract and send it to the lender's foreclosure attorney. Only the lender can postpone a sale, so plan as if the date is real.

The options, side by side

Option	Keeps the home?	Best fit
Forbearance	Yes	Short hardship, income coming back
Repayment plan	Yes	A few payments behind, income back to normal
Loan modification	Yes	Lasting income drop
Partial claim or deferral (some loan types)	Yes	Can afford the normal payment again
Reinstatement	Yes	Has a lump sum before the cure deadline
Regular sale	No	Has equity
Short sale	No	Owes more than the home is worth
Deed in lieu	No	No equity, home didn't sell, lender agrees
Foreclosure	No	What happens if nothing else does

The servicer and the loan type decide which options are on the table. See short sale basics and comparing options for an underwater seller.

How to explain it to your client

Say it like this

"You have more choices than you think, but the clock matters. First, call a free HUD-approved housing counselor. They don't charge and they don't sell anything. Second, get your loss mitigation application to your servicer, complete, and get a confirmation. Third, let me tell you what your home would sell for. If you have equity, selling before the auction puts that money in your pocket. If you owe more than it's worth, we can talk about a short sale. You pick the path. I'll make sure you see the numbers."

Watch-outs

Never let them pay upfront fees. Federal rules ban most upfront fees for mortgage relief services. HUD counselors are free.
Warn about "rescue" deals. Signing the deed to a stranger who promises a rent-back is how owners lose the house and the equity.
Pay only the servicer. Fake letters with new payment addresses are common.
Don't promise a postponement. Only the lender can postpone.
Equity is at risk. If the home is worth more than the debt, a sale before the auction usually beats letting it go.
Forgiven debt may be taxed. Send them to a CPA and IRS Publication 4681.
Don't tell them to move out early. That's an attorney and insurance question.
Be kind. No judgment. This happens to good people.

Questions

How long does foreclosure take in Colorado?

The public trustee usually sets the sale about 110 to 125 days after the NED is recorded for a typical home. Lenders can postpone it. Check the notice for the real dates.

Can an owner sell while in foreclosure?

Yes, up until the sale. Past-due amounts are paid at closing. If they owe more than it sells for, the lender must approve a short sale.

Is there a redemption period after the sale?

Not for the homeowner under current Colorado law. Act before the sale.

Is a short sale better than foreclosure?

For many owners, yes. They choose the buyer and the date, and waiting periods to buy again are often shorter. A counselor and attorney can confirm for their case.

Who's free to call?

HUD-approved housing counselors and Colorado Housing Connects. Never pay upfront.

Brian Lee Burke is the founder of PadLeaders, a Colorado real estate broker licensed since 2003, team leader of The Kenna Group at Keller Williams DTC (formerly Kenna Real Estate Group) and the author of Mastering Real Estate and The Real Estate Playbook. More about Brian.

Sources

More answers