Paul Clark
In this Blog we open the conversation with
economic loss caused by the current mortgage
crisis.
Colorado Foreclosure Law Summary
Quick Facts
- Judicial Foreclosure Available: Yes
- Non-Judicial Foreclosure Available: Yes
- Primary Security Instruments: Deed of
Trust, Mortgage
- Timeline: Typically 60 days
- Right of Redemption: Yes
- Deficiency Judgments Allowed: Yes
In Colorado, lenders
may foreclose on deeds of trusts or mortgages in
default using either a judicial or non-judicial
foreclosure process.
Judicial Foreclosure
The judicial process of foreclosure, which involves
filing a lawsuit to obtain a court order to
foreclose, is used when no power of sale is present
in the mortgage or deed of trust. Generally, after
the court declares a foreclosure, your home will be
auctioned off to the highest bidder.
Non-Judicial Foreclosure
The non-judicial process of foreclosure is used when
a power of sale clause exists in a mortgage or deed
of trust. A "power of sale" clause is the clause in
a deed of trust or mortgage, in which the borrower
pre-authorizes the sale of property to pay off the
balance on a loan in the event of the their default.
In deeds of trust or mortgages where a power of sale
exists, the power given to the lender to sell the
property may be executed by the lender or their
representative, typically referred to as the
trustee. Regulations for this type of foreclosure
process are outlined below in the "Power of Sale
Foreclosure Guidelines".
Power of Sale Foreclosure Guidelines
The foreclosure process in Colorado is quite
a bit different than in other states because
here, the governor appoints a "Public Trustee"
for each county in the state. The trustee must
act as an impartial party when handling a power
of sale foreclosure. In Colorado, the
non-judicial power of sale foreclosure is
carried out as follows:
The process begins when the attorney
representing the lender files the required
documents with the Office of the Public
Trustee of the county where the property is
located. The Public Trustee then files a
"Notice of Election and Demand" with the
county clerk and recorder of the county.
Once recorded, the notice must be published
in a newspaper of general circulation within
the county where the property is located for
a period of five (5) consecutive weeks.
The Public Trustee must also mail, within
ten (10) days after the publication of the
notice of election and demand for sale, a
copy of the same and a notice of sale as
published in the newspaper, to the borrower
and any owner or claimant of record, at the
address given in the recorded instrument.
The Public Trustee must also mail, at lease
twenty-one (21) days before the foreclosure
sale, a notice to the borrower describing
how to redeem the property.
The owner of the property may stop the
foreclosure proceedings by filing an "Intent
to Cure" with the Public Trustee's office at
least fifteen (15) days prior to the
foreclosure sale and then paying the
necessary amount to bring the loan current
by noon the day before the foreclosure sale
is scheduled.
The foreclosure sale must take place
between forty-five (45) and sixty (60) days
after the recording of the election and
demand for sale with the county clerk and
recorder. The Public Trustee may hold the
sale at any entrance to the courthouse,
unless other provisions were made in the
deed of trust.
The lender has the option to file a suit for
deficiency in Colorado and the borrower has up to
seventy five (75) days after the sale to redeem the
property by paying the foreclosure sale amount, plus
interest.
