If the owner is at least 4 months behind on mortgage payments that's when most banks will start the foreclosure process, once the attorney representing the bank files for Notice of Election & Demand at the County. The owner will receive a couple of notifications (1 by the attorney, and one by the county) in which the sale date will be established(about 4 months after NED was filed). Colorado no longer allows redemptions, meaning if the property is schedule to go into foreclosure by certain date, legally the very next day the house becomes bank owned property. However I've seen cases in which the bank will allow the owner 1-3 weeks to vacate. Before letting the property go into foreclosure the owner should seek counseling. Either by calling Colorado Foreclosure Hotline at: 877-601-4673 or by following the link to CO Non-Profit agencies
Also the owner should contact the lender, perhaps the lender is willing to accept a loan modification(modifify terms and condition of current note). Is the investor Freddie Mac, Fannie Mae?
If retaining possession of the home is not an option then the owner can either do a deed in Liue or Short-Sale:
If the property is FHA, and owner wants to do a deed in Liue some banks will allow Cash For Keys and the owner can get up to $1000 for moving expenses, certain criteria must be met prior to owner getting the insentive
If Short-Sale, make sure Realtor is knowledgeable in the short-sale procedure. IF FHA loan, also the owner can get up to $1000 worth of moving expenses.
Hopefully this answer your question.
Mobile: 303-808-4410 Office: 303-539-7670