Buying a house in Colorado? Here are 5 Tips for your Home Inspection!

Purchasing a house is often the largest purchase a consumer can make in their lifetime, so it’s little wonder why it’s highly recommended that before closing on the deal that a property inspector reviews the property and tries to find any problems for the buyer. But what happens if the property inspector misses something big, something that will cost the buyer several thousand dollars to fix?

I found myself recently in a situation where the property inspector missed several large problems that were very costly to repair. As a first-time homebuyer, I had no idea what to look for as possible problems with a potential property and relied heavily on the property inspector’s opinion. Sure the inspector found some obvious problems such as broken electrical sockets, questionable window locks, and missing smoke alarms. But two significant problems went undetected; that should have been discovered. The first issue was found immediately after closing on the property, and I started moving in. Underneath the sink in the basement bathroom was a tremendous amount of water damage and a thriving colony of black mold. Immediately  I thought back to the property inspection- how did this get missed?! Then it hit me; I remembered how cluttered the cabinet under the sink was at the time of the inspection, and neither the inspector or I wanted to remove all the items the seller stored under there. Simply taking the time to remove a few items, or asking the seller to move them, to inspect the floor board of the cabinet could have saved me quite a bit of money in repairs and mold mitigation.

The second problem, like many household issues, didn’t surface until much later. At the time of inspection, I vividly recall having a lot of questions about the Boiler system. The property was built in the late ’70s and used baseboard heating for the winter, which is something I never used before. The inspector glanced over the boiler system and told me everything looks good, boiler systems last 50-70 years on average, and informed me to have the seller do a tune-up as a condition of the sale. Seemed fair enough and the seller had no qualms with doing a tune-up. It wasn’t until the end of this winter when I brought a contractor out to do another tune-up that I discovered that not only was this boiler system in such bad condition that a tune-up could not be performed, but that it should have never passed inspection since the setup was done backwards, highly corroded, and is in violation of numerous building codes. The cost to replace the system and put it up to code: $14,000! Ouch! This piece of information would have been great to know during the inspection and could have been negotiated during the sale of the property. Needless to say, I felt a bit slighted by my property inspector- how could he have missed this, and could he potentially be liable for such a huge oversight?

Unfortunately, in Colorado, property inspectors are not regulated by any state agencies and usually limit their liability through their contracts. In my particular circumstance, the property inspector had a clause that limits his liability to the purchase price of his services- a measly $200. While there may be some ways to pierce this clause, such as fraud, the likelihood of success is quite small and would cost significantly more in legal fees to do so.

Although I am unlikely to hold the property inspector responsible for his huge oversights, I did come out of this experience with a few lessons that I can pass along:

  1. Be there at the inspection! Don’t just trust that the inspector will look at everything and get back to you. Now is your chance to ask questions about the property, so take advantage of it.
  2. Don’t be afraid to request the seller to move things around to get a better visual. This is where I failed. I noticed there was a huge mess of stuff inside the cabinet underneath the sink, but did not move any of the items to get a proper visual on the condition of the inside cabinet. Moving just a few items would have exposed significant water damage and black mold at the bottom of the cabinet.
  3. Don’t be afraid to ask questions. Unless you’re a contractor, you probably don’t know much about the “guts” of the house: the electrical, plumbing, and HVAC systems. So ask plenty of questions. A good inspector will answer all of your questions thoroughly and will explain what he’s doing and looking at all along the way.
  4. Get a specialist. A home inspector is like a doctor who’s a general practitioner. They both can diagnose problems, and they both know when to refer you to a specialist. If your housing inspector recommends a specialist, you should get one. In my case, bringing in a specialist to review my boiler system would have saved me $14,000 in repairs.
  5. Inspect your inspector. Your real estate agent might suggest a home inspector, and that inspector could turn out to be wonderful. But you’re the one buying the house, so make sure you choose well. Besides asking your friends and neighbors, use the American Society of Home Inspectors to vet their recommendations and make sure you hire someone who’s qualified.

Reverse Mortgage Scams: How to Protect Yourself

As more American’s move into retirement, more and more people are taking advantage of a reverse mortgage to access the equity in their home. However, this also means that scams involving reverse mortgages are on the rise. These scams can take many forms, including:

  • Contractor Fraud: This scam involves someone convincing you that you need home improvements or repairs that you can pay for by letting them help you take out a reverse mortgage.
  • Flipping Fraud: This type of reverse mortgage fraud involves convincing someone to use a reverse mortgage to move into a smaller, less expensive home. Often these homes have been made to look nice but are actually of very poor quality.
  • Theft: This is the most simple reverse mortgage scam but also the most destructive. In this scam, a trusted advisor or relative convinces someone to take out a reverse mortgage in order to pay off their existing mortgage but instead simply walks away with the funds.

For more information on types of reverse mortgage scams see

Fortunately, there are some simple steps you can take to protect yourself if you are considering a reverse mortgage. First, it is good to know a little bit about how reverse mortgages work. Reverse Mortgage are actually called Home Equity Conversion Mortgages (HECMs) and are insured by the Federal Housing Authority. In order to qualify for an HECM, a borrower must meet the following qualifications:

  • 62 years of age or older
  • Occupy their property as a primary residence
  • Own (at least mostly) their property

Any product that doesn’t meet the above criteria is something you should be skeptical of. Also, there is an excellent network of advisers across the country who specialize in assisting people who are interested in a reverse mortgage. These counselors are generally FHA housing specialists who can offer their services to you for free or at a very low cost and can help you determine if a reverse mortgage is right for you. In addition, these counselors can help you make sure that the product you are looking at is a legitimate HECM. The U.S. Department of Housing and Urban Development maintains a database of HECM counselors across the country that you can use to find help in your area. This database can be found at:

Just like any other financial product, you should never feel rushed in entering into a reverse mortgage. Get help from the network of HUD advisers and help your community by reporting any suspicious reverse mortgage activity to HUD at 1-800-347-3735.

Facing Foreclosure? Avoid These Common Mistakes and Instead Take Some Positive Steps

Homeowners facing foreclosure are often financially stressed and emotionally overwhelmed, and this can lead to mistakes that make them worse off. If you or someone you know is facing foreclosure, avoid these common mistakes:

  1. Doing Nothing


Lenders cannot foreclose until 120 days after your first missed payment. That means you have about four months to avoid foreclosure or minimize your losses. The sooner you act, the more options you’ll have.

  1. Falling Victim to Foreclosure Avoidance Scams

Foreclosure avoidance scams are a huge problem. Watch out for these red flags:

  • High or Upfront Fees

You do not need to pay someone to understand your options. Housing counselors approved by the U.S. Department of Housing and Urban Development (“HUD-approved housing counselors”) will help you for free. If someone wants to charge you for their services, be very skeptical!

  • Guarantying Results

No one can guaranty a result when it comes to foreclosure. Most options require your lender to agree. If someone says they can guaranty you will get a loan modification or some other foreclosure avoidance option, this person is probably not legitimate.

  • Signing Over Your Deed to a Third Party

This is a scam to get your house!

Remember, signing over your deed will not wipe out your loan. But it will cause you to lose any legal right to your house.

  • Making Mortgage Payments to Anyone Other Than Your Lender

Anyone who suggests this will probably take your money and run. Always pay your lender directly.

  • Anyone Who Tells You to Stop Talking to Your Lender

You will have to talk to your lender directly to work out any of the foreclosure avoidance options you decide to pursue. Not communicating with the bank will only make things worse, so this is very bad advice.

  • Anyone Who Tells You to Stop Paying Your Mortgage

This will only make the problem worse. You do not want to be further behind on your payments.

  • Unsolicited Contacts from Other States

Foreclosure law is different from state-to-state, so if someone from Florida is offering to help with your Colorado foreclosure, be very skeptical. A Florida lawyer or housing counselor probably doesn’t know anything about Colorado foreclosure law.

  • Remember, If It Sounds Too Good to be True, It Probably Is!

If something doesn’t sound right, don’t hesitate to contact a HUD-approved housing counselor or a lawyer.


So what should you do if you’re facing foreclosure?


The sooner you act, the more options you will have.

  1. Contact a HUD-Approved Housing Counselor.

HUD-approved housing counselors can help you understand what your options are and what might work best for your particular situation.

In Boulder County – contact Boulder County Housing and Human Services to talk to a housing counselor.


Phone: 303-441-1000

Outside of Boulder County – contact HUD to find housing counselors near you.


Phone: 1-800-333-4636

For veterans with VA Home Loans, contact Veteran Services for foreclosure-avoidance assistance.


VA Loan Guaranty Office: 1-800-827-3702

VA Regional Loan Center for Colorado: 1-888-349-7541

  1. Contact Your Lender Right Away.

Contact your lender as soon as possible after missing a payment, or even before missing a payment if possible. This will show them that you are serious about finding a mutually-acceptable solution.

If you are having problems with your lender (e.g., they aren’t communicating with you, you feel like you’re getting the run-around, etc.), talk to a HUD-approved housing counselor, contact a lawyer, and/or file a complaint with the Consumer Financial Protection Bureau.

CFPB Website:

CFPB Consumer Help Line: (855) 411-2372

Zombie Mortgages – Don’t Let It Happen to You

What is a Zombie Mortgage?

Zombie mortgages occur when a bank notifies a homeowner that it is foreclosing; the homeowner vacates the property; but then the bank abandons the foreclosure without notifying the homeowner. This leaves the home in a state of limbo. No one lives there, but the homeowner technically still owns it.

Why Would a Bank Abandon a Foreclosure?

Owning and maintaining a property is expensive and time-consuming. The legal owner has to keep the house in good repair and pay property taxes. Reselling a property can also be costly, and, depending on the sale price, the bank could even lose money on the deal (if the outstanding loan is more than house sells for).

Zombie foreclosures are less common in places like Boulder, where home prices are relatively high and houses sell quickly. But in places like Detroit, where housing prices have not recovered, banks do not want the expense of owning and maintaining properties that they cannot sell. For this reason, the bank may send foreclosure notices as a matter of course but then never pursue the foreclosure because it is just not profitable.

Zombie mortgages can also happen if a homeowner cannot pay their mortgage and wants to voluntarily give the house to the bank in exchange for the bank forgiving their loan. (This is called a “deed in lieu of foreclosure.”) If the bank does not accept the deed in lieu of foreclosure, then the deed remains in the homeowner’s name and he is still responsible for the house and the mortgage, even if he has abandoned the property.

How Does Abandoning a Foreclosure Affect the Homeowner?

Homeowners who are being foreclosed may not be able to fight the foreclosure (usually because they don’t have the money), and so when they get the foreclosure notice, they simply abandon the house. But they still own the property until the bank completes the foreclosure process. As the legal owner, they must maintain the house and pay property taxes. And because the foreclosure was never completed, their mortgage is still alive. That means that even after abandoning the home, the owner is racking up thousands or tens of thousands of dollars in property taxes, fines, and mortgage interest, fees, and penalties.

How to Avoid a Zombie Mortgage

Keep yourself informed about the status of the foreclosure until you are sure it is complete and the deed has been transferred to the bank. You can search for the property status and request documents on the Boulder County Clerk & Recorder website at

If you want to use a deed in lieu of foreclosure, make sure that the bank is willing to accept the deed and that the deed has actually been transferred to avoid a zombie mortgage.

Payday Lenders in Disguise

This blog has periodically covered the dangers of payday loans. Payday loans charge extremely high interest rates and often leave borrowers deep in debt. Sources show that the average consumer who takes on a payday loan is in debt for over 6 months, is charged an annual interest rate of over 400%, and has to extend the original payday loan 9 times. There is almost never a situation in which a consumer in need should turn to a payday lender for fast cash.

There are a number of alternative options when consumers need cash or need to pay down existing debt. Those alternatives include setting up a payment plan with creditors, salary advances, credit counseling, credit union loans, emergency assistance programs, and — as a last resort — credit card cash advances. As this blog has shown, taking out a payday loan will almost always leave consumers in deeper debt than before taking out the loan.

There are many individuals and organizations trying to educate consumers on the danger of payday loans, and deter consumers from taking on payday loan debt. Many state governments, including Colorado, have passed laws that limit the interest rate payday lenders can charge. These laws are an attempt to protect consumers from predatory financial products. While the Colorado law has helped consumers to some extent, the industry continues to grow and 77% of Coloradans still live within 5 miles of a payday lender.

Many states have recognized the problem with payday loans and are addressing the issue through laws and regulations. However, some of these payday lenders have adapted their business model in an attempt to make sure they don’t have to comply with the law. The new business models create a type of payday lender in disguise – they essentially function like a payday lender and offer extremely high interest rates without having to comply with payday loan laws. The following are a few examples of loans to be careful of:

  • Auto title loans: Also known as a car title loan, this is a loan where the borrowers car is used as collateral. This means that if the borrower does not make loan payments on time then the lender can repossess the borrowers car and sell it in order to repay the borrowers debt. Similar to payday lenders, auto title lenders often charge extremely high rates of interest to borrowers.
  • Tribal affiliated loans: Due to the increase in regulation many payday lenders have started partnering with Indian tribes in order to offer payday loans over the Internet. By partnering with Indian tribes many of these lenders do not have to comply with US law. Partnering with Indian tribes is a way for these payday lenders to keep taking advantage of consumers by charging excessive interest rates.
  • Mobile Home Loans: Recently, reports have uncovered unfair lending practices by mobile home manufacturers. Such reports have found that loan terms have included high interest rates, undisclosed fees, and terms that would make selling or refinancing the home impossible. As always, before financing the purchase of a mobile home consumers should talk to financial professionals they trust and not just the sellers of the mobile home.

Your Foreclosure Rights

Foreclosure is a scary process. Navigating the waters and understanding the process is daunting. There are significant benefits to individuals and the community in the preservation and growth of home ownership. Included in the laws designed to protect consumers, Colorado has adopted the Foreclosure Protection Act (the “Act”) to help ease the burden on consumers faced with foreclosure.

If you are facing the possibility of being displaced from your home, your first step should be to contact the Colorado Foreclosure Hotline at 1-877-601-HOPE (4673). Making this call will connect you to a housing counselor who can help offer free assistance. On their website (, the Hotline points out that, “There were 19,622 foreclosures in Colorado in 2011…but four out of five that met with a Colorado Foreclosure Hotline housing counselor successfully avoided foreclosure.” Many factors go into whether or not you can avoid foreclosure, but knowing the right questions to ask could be the difference between staying in your home or rushing to find alternative housing opportunities. Things you should discuss with a housing counselor include setting up alternative payment arrangements, and the timelines that lenders must follow before initiating, and during, the foreclosure process.

Often times the most appropriate action will be to engage an attorney familiar with foreclosure and consumer protection laws. An attorney will be able to help you consider warnings that the Act and the Colorado Attorney General have identified with regard to consumer foreclosures.


Foreclosure Process

In order to initiate the foreclosure process, your lender is required to send you a thirty (30) day notice to allow you the opportunity to speak with a housing counselor and your lender’s loss mitigation department. Only after the expiration of this notice period can your lender proceed with the formal foreclosure process. If you do receive one of these notices, do not ignore it. As indicated, four out of five people who call the Hotline have the opportunity to stay in their home.

If the foreclosure process proceeds past the notice stage, you will receive a series of additional notices setting forth, among other things, information related to the date of sale. Initially, the sale is set to take place in 3-4 months, but delays and postponements could push the actual sale date farther down the road. Depending on where you live—and even if you have vacated the property—you may have continuing obligations with regard to the property, such as HOA assessments, until the property is actually sold. This is one of the most critical reasons to consult a knowledgeable attorney in order to understand what responsibilities you may carry until the property transfers.

Do not forget that you have the right to cure the default on your loan up to fifteen (15) days before the date of foreclosure sale. In order to cure the default you are required to file certain notices with your lender and public officials. An attorney can help you make sure your notices are properly drafted and sent to all the necessary parties.


Foreclosure Consulting Contracts

The Act specifically addresses the engagement of a foreclosure consultant. Generally speaking, a foreclosure consultant is an individual you hire in a non-attorney relationship to assist you through the foreclosure process, and who is not affiliated with your lender. The Colorado Attorney General warns that various individuals may contact you to help you avoid foreclosure after you are in default on your mortgage. By law, these individuals are required to follow certain rules in the Act, which you should ensure are followed before agreeing to pay a foreclosure consultant a fee. A consultant is not allowed to charge or collect any fee from you until the consultant has fully performed his or her services.

A consultant is also required to provide you with a written contract for you to keep at least twenty-four hours before you sign it. The contract must contain the following notices:

  • The consultant cannot ask you to sign any document that transfer your ownership to the consultant or his or her associates.
  • The consultant cannot guarantee that they will be able to refinance or arrange for you to keep your home.
  • You have the right to cancel the contract at any time by written notice. The consultant is required to provide you with a “Notice of Cancellation” form. If you are unsure about how to properly complete this form, call the Hotline!
  • If you cancel, you must repay certain expenses plus interest spent by the consultant on your behalf.

The Attorney General also warns against individuals and scams that offer short-term loans that allow you to cure the current default, but leave you unable to pay off the short-term loan. You should also be extremely cautious of any individual who wants you to transfer title to your property with an option to repurchase at a later date. Before you make any decision related to a current or foreseeable foreclosure, call the Hotline and speak to an attorney.

Making and Saving Money in the Sharing Economy, Part II

This article is the second in a two-part series on this topic.  To see the whole story, please start with Making and Saving Money in the Sharing Economy, Part I.

What is it? A web and smart phone app that connects people with extra sleeping quarters to those in need of a place to sleep for short periods. On you can rent anything from a couch to a castle, from a basement to a bedroom.

What should I look out for? Like Uber and Lyft, make sure that your insurance provider knows what you’re up to and that your renter’s or home-owner’s insurance policy covers you and your guests. Airbnb does offer a $1 million host guarantee, which protects hosts from theft or damage to property caused by a guest. Also like Uber and Lyft, always pay attention to reviews left by others. Also, Airbnb will verify user’s IDs, making sure that a person is who they say they are and that they can be located if needed. Always look for the “Verified ID” badge on a user’s profile.

Finally, as a host, you should always pay attention to local laws and regulations regarding zoning, occupancy restrictions, licensing requirements and taxes. Many municipalities forbid short-term rentals, others require that hosts collect and remit lodging taxes to city governments.  In Boulder, CO, for example, short term rentals in residential units may violate zoning restrictions, licensing requirements, and short term lodging taxation requirements.  However, for the time being, the City of Boulder has publicly announced that it will not be enforcing these regulations against short term rentals.   Always call you local government office to find out if you can offer short term rentals from your home.

What is it? A platform connecting people with pets to people willing to look after pets.

What do I need to become a pet-sitter? Smart phone or camera + computer; love of pets; and a home that lets you take in pets or transportation to and from the pet-owner’s home (some pet owners prefer their pets stay at home).

How much are people making? The average nightly rate per pet is around $30. When you’re starting out on any sharing economy platform, it’s usually wise to offer low prices until you’ve been reviewed by a few people. Once you’ve got some reviews you can always raise your prices!

What is it? A platform connecting people who need odd jobs done to people who can do those jobs. This is especially exciting in Boulder / Denver because very few “taskers” are listed.

What do I need to become a tasker? Access to the website or smart phone app, time to do tasks, a relatively clean background check ( requires this) and a client-focused attitude.

How much are people making? The average hourly rate is around $25, but varies greatly depending on the type of task and the experience / reviews of the tasker.

What is it? A platform connecting people who need to rent a car to people who are willing to rent out their car. This is also exciting in Boulder because we have a large volume of tourists visiting the city, and very few cars available on the site. Want to rent out your bike instead? Try

What do I need to become a tasker? Access to the website or smart phone app, a reliable car, and a strong insurance policy. Note that RelayRides may insure your vehicle for certain liabilities, and renters have the option of purchasing additional coverage through RelayRides.

How much are people making? Depending on the make, model, and condition of your car, you could rent it out for anywhere from $15 to a few hundred dollars a day.


General notes on becoming a provider on sharing platforms

When you become a provider of any type of resource, product, or service, you essentially become a business owner. Your customers will have basic expectations about the quality of the product or service they receive. Those expectations may be based on what you’ve promised on your profile or listing, or based on general, reasonable expectations in the field. No matter where the expectations come from, your success will depend on meeting and exceeding customer’s expectations.

Customers will leave reviews about their experience with you. If those reviews are positive, you are likely to get more business, if they’re negative, you may never get another customer on that platform. You cannot simply delete a profile and start from scratch – once you start on any of these platforms, you’re stuck with any reviews you get for life.

Next, as someone providing a product or service in exchange for money, you have a heightened responsibility to make sure that what you’re providing is safe. Always think of safety first, and never put your customer or their property in dangerous situations.

Finally, always be sure that the laws in your jurisdiction do not forbid whatever you’re doing, and remember that you will probably have to pay taxes on any income.

Time Limits on Lawsuits by Debt Collectors

One way debt collectors try to get repaid is by bringing a lawsuit against the debtor in court.  If the debt collector is successful in the lawsuit, the debt collector may be given permission to take special steps to collect on the amount owed.  (Such steps might include garnishment of wages, or the freezing and seizure of funds from the debtor’s bank account.)  But when it comes to lawsuits against the debtor, time may be a deciding factor in the outcome.

State laws limit the amount of time a debt collector has to file a lawsuit with the court. When this time limit has passed, the law says the debtor may have the lawsuit thrown out for not meeting the applicable time constraints.  This concept of a legal time limit for the debt collector to sue is called the Statute of Limitations.  In legal terms, when the time limit has passed, it is said that “the statute of limitations has run.”

This blog takes a look at the rights and obligations of a debtor when the time limit to sue has passed. Below are some questions and key points to remember about your debt after the statute of limitations has run.

When the time limit to sue has passed, and a debt collector can no longer sue in court, what does that mean about the underlying debt?

  • The debt still exists, or put another way, the debtor’s promise to repay the debt still lives on. However, the debt collector no longer has the ability to sue or ask the court for permission to take the special steps mentioned above.  (That’s not to say some debt collectors still won’t try to bring a lawsuit.  It is always important to pay attention to notices from a debt collector because one might include a notification of a lawsuit .  If a debt collector sues outside of the time limit, you should not rely on the courts to enforce the statute of limitations on the debt collector.  In fact, many states require the debtor to prove that the time limit has expired.  For more details on these situations and possible legal support check out the this page at the Consumer Financial Protection Bureau)

What can the debt collector do after the time limit to sue has passed?

  • After the time limit has passed, and even though the debt collector cannot sue or take action in court, the debt collector may still contact the debtor. The debt collector may ask the debtor to repay the debt in full or setup a repayment plan or attempt to recover a portion of the debt. It’s important to remember that such contact is still governed by federal and state fair debt collection laws. The debt collector must still follow the rules. For a good summary on these rules visit another article on this website: Dealing with Debt Collection.

Should the debtor worry about the debt if the law won’t make him repay it?

  • Outstanding past-due debt may still have an adverse impact on a consumer’s ability to borrow in the future. Other creditors, banks, and financial institutions may be more reluctant to make loans or extend credit when they know a consumer has a history of unpaid loans.  After the time limit to sue has passed, the debtor may voluntarily decide to repay the debt but the courts cannot make him do so.  If a debtor is going to make payment to a debt collector after the statute of limitations has run, the debtor should seek legal advice.  The Federal Trade Commission has a helpful page explaining why repayment after the statute of limitations can be complicated, here.

So should a debtor just wait until the statute of limitations runs, and ignore any attempts by the debt collector to get the debtor to repay?

  • The debtor should never ignore the status of his outstanding debt. Up until the statute of limitations has run, a debt collector can bring legal action for repayment, and if the debtor has ignored important notices about the legal action, the debtor could miss out on his day in court (to dispute the debt or make other arguments against the debt collector). Therefore, it is always important to pay attention to correspondence received regarding an outstanding debt. While the debtor has the right to tell the debt collector to leave him alone, doing so does not mean the debt collector can’t take legal action before the statute of limitations is out.

So how do you know if the statute of limitations has run? (How do you know when the creditor can no longer take legal action regarding repayment of the debt?)

  • It is not within the scope here to explain how to determine the time limit a creditor has to take legal action. However, a quick search of the internet using queries such as “Statute of limitations and debt collection,” “Time-barred debts” and “Statute of limitations for old debts” all will provide helpful resources on the topic. Generally, the debtor should check his state laws to find out the length of time a debt collector has to pursue legal action. This length of time varies by state and by the type of debt or loan the consumer entered into. Also, different events trigger the clock on the statute of limitations.

Ultimately, if a debt collector has run out of the time allowed to sue a debtor, the debt collector can no longer use the law to force payment.  Nevertheless, a debtors should still be aware of their rights and existing obligations even after the statute of limitations has run.