How to Stop Foreclosure in Colorado

How to Stop Foreclosure in Colorado
Each state has a different process when it comes to foreclosure even if we know for a fact that it is basically a process that prevents you from owning your home simply because you can no longer pay for it. There are several different types of foreclosures.

First is judicial and non judicial foreclosure. In Colorado, this type of foreclosure can take place when there is no power of sale on your investment. If in case you cannot pay for your home any longer, a lawsuit can be filed on your name to grant it the power to foreclose your home. The idea behind is that, the borrower or the purchaser, with his or her inability to pay the home, would be authorized to foreclose it in certain conditions.

When there is inability to pay on the part of the lender, then a public trustee can be appointed. A lawyer or the lender can file a dispute at the Office of the Public Trustee in the area where the home is situated and where the debtor currently resides in. Once this is filed, and the debtor is informed but still no payment is made, then the public trustee can file a notice of election and demand. This notice is advertised on the newspapers for about 5 weeks and states that the property may be available on the market in the coming weeks.

A copy of the letter should be mailed to the public trustee within 10 days of issuance. The homeowner should be contacted too within 21 days otherwise it would no longer be feasible for the home owner to still own the same home.

In the end, the idea is to pay your dues on time to be able to avoid such problems in the future and still own a home.

Synopsis of Colorado Foreclosure Laws
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.