Colorado Foreclosure Laws

I created this website to help the thousands of Colorado families faced with the foreclosure of their home. Whether you are in foreclosure, facing a short sale, or even a bankruptcy I sincerely hope that the information on this site helps you to make an informed decision.

John

Disclaimer

None of the information on this site should be construed as legal advice. You should always consult an attorney for advice about your specific foreclosure situation.

How Wikapedia.org explains foreclosure…

Foreclosure is the legal process by which a mortgagee, or other lien holder, usually a lender, obtains a court ordered termination of a mortgagor’s equitable right of redemption.[clarification needed] Usually a lender obtains a security interest from a borrower who mortgages or pledges an asset like a house to secure the loan. If the borrower defaults and the lender tries to repossess the property, courts of equity can grant the borrower the equitable right of redemption if the borrower repays the debt. While this equitable right exists, the lender cannot be sure that it can successfully repossess the property, thus the lender seeks to foreclose the equitable right of redemption. Other lien holders can also foreclose the owner’s right of redemption for other debts, such as for overdue taxes, unpaid contractors’ bills or overdue homeowners’ association dues or assessments.

The foreclosure process as applied to residential mortgage loans is a bank or other secured creditor selling or repossessing a parcel of real property (immovable property) after the owner has failed to comply with an agreement between the lender and borrower called a “mortgage” or “deed of trust”. Commonly, the violation of the mortgage is a default in payment of a promissory note, secured by a lien on the property. When the process is complete, the lender can sell the property and keep the proceeds to pay off its mortgage and any legal costs, and it is typically said that “the lender has foreclosed its mortgage or lien”. If the promissory note was made with a recourse clause then if the sale does not bring enough to pay the existing balance of principal and fees the mortgagee can file a claim for a deficiency judgment.

Judicial Foreclosure Yes
Non-Judicial Foreclosure Yes
Security Instruments Deed of Trust; Mortgage
Right of Redemption None
Deficiency Judgments Yes
Time Frame 110-125 days

Judicial foreclosure is employed when no power of sale clause is included in the security instrument. In Colorado, the lender must sue the borrower and obtain a court order to foreclose.

The non-judicial procedure is used when a power of sale clause authorizing the lender to sell the property in the event of default is included in the loan document. The Colorado foreclosure process differs from most other states in that the Governor appoints a Public Trustee for each county.

The Public Trustee acts as an impartial third party in handling non-judicial foreclosures. The procedure is as follows:

1. The lender’s attorney files the required documents with the Public Trustee who then records a notice of election and demand with the county clerk. The Public Trustee then must publish the notice of election and demand in a newspaper of general circulation in the county where the property is located for five consecutive weeks.

2. The Public Trustee must also mail a copy of the notice of election and demand and a copy of the notice of sale to the borrower at the address in the recorded security instrument within ten days of the publication. The Trustee must also, at least twenty one days before the date of sale, mail to the borrower a notice containing instructions on how to redeem the property.

3. The borrower may stop the process by filing a notice of “intent to cure” with the Public Trustee at least fifteen days prior to the sale and then bring the loan current by noon of the day before the sale.

4. The sale must take place between forty five and sixty days after the recording of the notice of election and demand. The Public Trustee may hold the sale at any entrance of the courthouse unless other provisions were made in the deed of trust.

Right of redemption: None (Repealed)

Deficiency judgment: The lender may file suit to recover any deficiency balance.