Colorado Foreclosure Laws Subject To Change
The Colorado foreclosure summary below provides information on your state’s most common foreclosure rules. However, you should also know that your state’s foreclosure laws and procedures are subject to legislative, judicial, and local rule changes.
The information below is intended to provide you with a beginning point for understanding the intricacies and complexity of your state’s foreclosure law.
You will also need to consult with a local foreclosure defense lawyer to obtain a complete and current understanding of your state’s foreclosure laws and how they may apply to your specific legal and financial situation.
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 the property to pay off the balance on the loan in the event of their default.
Where Power Of Sale Exists
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 the 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.
Notice of Election And Demand
The Public Trustee then files a “Notice of Election and Demand” with the county clerk and recorder of the county.
Publication Requirement
Once recorded, the notice must be published in a newspaper of general circulation within the county where the property is located for five (5) consecutive weeks.
Mailing Requirements
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 least twenty-one (21) days before the foreclosure sale, a notice to the borrower describing how to redeem the property.
Owner’s Right To Cure Default
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 before 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 occur 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 might hold the sale at any entrance to the courthouse unless other provisions were made in the deed of trust.
Lender Can Seek Deficiency Judgment
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.