Colorado continues emergency mortgage relief plan for homeowners at risk of foreclosure due to COVID-19 pandemic

COLORADO SPRINGS, Colo. (KRDO) – State officials have created a program to help tenants who have struggled to pay rent during the COVID-19 pandemic, and now a similar program is in place for landlords .

The program, which falls under the Department of Local Affairs, is called the Colorado Emergency Mortgage Relief Program and has $175 million to allocate through the end of 2026.

Local Affairs Department

Homeowners are eligible to apply if they experienced financial hardship related to the COVID-19 pandemic after January 1, 2020 and have incomes equal to or less than 100% of their region’s median income.

The state said 750 homeowners have received assistance so far, including 106 in El Paso County with another 300 cases pending; the average price for owners is $9,000 and the maximum is $40,000.

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Randi Davis, program administrator in El Paso County, said the state is currently processing applications from February through March, so we may only be seeing the tip of the iceberg — as experts have said that he rising foreclosure rate is a sign that the region’s hot property market is about to calm down.

“The program actually started last fall,” said Davis, who works for the Rocky Mountain Community Land Trust, an agency that advises first-time home buyers and helps potential buyers find affordable housing. “But in most places you had to apply online. We now have a local office that can help people navigate the process.”

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Davis said she’s seen 10 to 15 new foreclosures filed each week, and the county is now at 455 foreclosures for the year — three times as many as last year.

Many people have lost their jobs or taken pay cuts during the pandemic.

Pikes Peak Realtors Association

“In 2009, the county averaged 102 foreclosures per week,” Davis said. “Fortunately, we are not there yet.”

However, she adds that the apparent increase in foreclosures will not help people who are still struggling to find affordable and available homes.

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“A lot of people are hoping this situation will help them,” she explained. “Unfortunately, I think cash buyers and investors will absorb the foreclosures we’ve had – at least for a bit longer.”

Davis said there were two lockdown-related factors at work.

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“I think the foreclosures we see here are not from landlords, but from lenders,” explained. “Probably smaller financial institutions that couldn’t survive after missing so many mortgage payments. But I also think there are landlords that didn’t have a plan to deal with the pandemic, the higher the rate higher interest rates and inflation than we’re seeing now.”

Ann Kidd, head of the Pikes Peak Association of Realtors, said the situation shouldn’t panic homeowners.

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“The sky is not falling,” she said. “We don’t see the need for anyone to foreclose on a property, if they own the property. We need buyers so badly in our city right now, there’s no need for anyone to panic and walk into a state of foreclosure.”

But people who have it will have it on their credit report for seven years, Davis said — and that will make it harder to find another home than the one they’ve already lost.

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For more information visit: https://cdola.colorado.gov/emergency-mortgage-assistance.