Foreclosure Assistance Moves Forward; CCLP Testifies at Senate Hearing

House Bill 1276, which provides a 90 day delay or time out in the foreclosure process for qualifying homeowners, passed the Senate Judiciary Committee yesterday on a 5-2 vote. It now goes to the Colorado Senate floor for consideration, and if passed there, goes to the Governor for signature to become law.

Ed Kahn, Colorado Center on Law and Policy's Special Counsel, testified strongly in favor of the bill. The legislation is "like an EMT who stabilizes the economically distressed patient on the way to the hospital. Here, the opportunity to negotiate is like effective treatment," Kahn said.

The bill would provid the possibility of a negotiated workout and a 90 day timeout for borrowers who have a "have a reasonable likelihood" of being able to afford a renegotiated loan. A credit counselor working with the homeowner, through the Foreclosure Hotline, would make the determination. Homeowners who are unlikely to be able to afford a workout would not be helped by the bill, but could still seek renegotiation by direct contact with the lender or the Foreclosure Hotline.

The Bill is sponsored by Rep Mark Ferrandino and Sen Morgan Carroll.