A homeowner in Colorado is in default on her mortgage. Her loan has a principal balance of $240,000. She is four months behind on her monthly payment of $1,500. The lender has assessed a late fee of $75 per missed payment and the Public Trustee has recorded costs of $800. If the homeowner wants to exercise her right to cure the default and stop the foreclosure, what is the minimum total amount she must pay?
Correct Answer
C) $7,100
To exercise the right to cure under C.R.S. § 38-38-104, the homeowner must pay all past-due amounts, late fees, and costs — but NOT the full loan balance. Step 1: Past-due payments = 4 months × $1,500 = $6,000. Step 2: Late fees = 4 months × $75 = $300. Step 3: Public Trustee costs = $800. Step 4: Total cure amount = $6,000 + $300 + $800 = $7,100. The homeowner does not need to pay the entire $240,000 principal balance to cure the default.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
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