Thank you for your question. I am happy to assist you.
Unfortunately you incurred a new personal liability by signing the new note.
It is not a reaffirmation, which would requires your bankruptcy attorney to sign or court approval. It is an entire new liability.
Unfortunately deficiency judgments resulting from foreclosure can be obtained in Colorado.
Typically lenders will reduce any deficiency to judgment and attempt to collect on that judgment against the mortgagor's assets or wages.
One way to stop a foreclosure proceeding is called a "deed in lieu of foreclosure".
This procedure allows you to transfer your property voluntarily to your lender or Mortgage Company and your debt or deficiency is often forgiven. This will not save your home, but it will help you with your chances of getting another mortgage loan in the future and it will help you avoid the lengthy legal process of foreclosure. Although it is a negative strike on your credit rating, it is less harmful than a mortgage foreclosure.
With a deed in lieu of foreclosure a borrower whose mortgage is in default voluntarily transfers title to the mortgaged property to the lender rather than forcing the lender to engage in a long and costly foreclosure action. The lender must consent to the transfer.
There are various reasons why a lender would not agree to accept a deed in lieu of foreclosure. For example, if it appears that the borrower has the resources available to cover any deficiency that may result most lenders will refuse to forgo the ability to collect the deficiency. Also, if the borrower is current in his payments, the lender has no incentive to negotiate.
If a deed in lieu of foreclosure is the route you decide to take, I suggest that you write to the lender or lender's attorney by certified mail, RRR and request this process.
I hope that the information which I provided was helpful to you.
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