The measure to be introduced next year would allow homes to be occupied more quickly.
Gov. Bill Ritter and state legislators announced the bill Tuesday at a news conference at the Clements Community Center in Lakewood. The bill, to be co-sponsored by Reps. Jeanne Labuda, D-Denver, and Dianne Primavera, D-Broomfield, and Sen. Mike John ston, D-Denver, will allow homes to be occupied more quickly so they don't become a safety hazard, a magnet for vandalism and other crimes, or a drain on nearby property values.
"Abandoned properties turn a family-friendly neighborhood into a hazard for children," Ritter said.
Current law calls for a minimum four-month sale process, but many foreclosure sales take seven to nine months to complete.
Currently, when a lender submits the paperwork to start the foreclosure process, the title for the property is still with the mortgage holder, even if the home is abandoned. That means there is no one responsible for maintaining the property, because the homeowner is gone and the home does not yet belong to the lender.
The bill would allow the bank to take over a property faster, giving municipalities and homeowners associations someone to hold accountable for maintenance.
"Before, we didn't discriminate between abandoned and non-abandoned," Ritter said. "When someone moves out and abandons their property, there's no reason not to move (the time frame) up and move it up quickly."
Colorado is on track to top the record of 39,900 foreclosure filings set in 2007 as widespread unemployment makes it harder for borrowers to make their mortgage payments. New foreclosure filings statewide during the third quarter reached a record high of 12,468, according to a report released last month by the Colorado Division of Housing. New filings for the first nine months of the year were up 18 percent to 35,112.
The number of completed foreclosures grew to 5,618 in the third quarter, the second consecutive quarter- over-quarter increase. But the total number of completed foreclosures fell to 14,971 during the first three quarters, compared with 16,265 during the same period last year.
The legislation would complement the $5.8 billion federal Neighborhood Stabilization Program designed to help foreclosure-blighted neighborhoods.
"More folks are fighting hard to maintain their mortgages," Johnston said. "The next critical step is to protect neighborhoods."
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