Colorado Foreclosure Laws
Judicial Foreclosure Available: Yes
Non-Judicial Foreclosure Available: Yes
Security Instruments: Deed of Trust, Mortgage
Right of Redemption Period: 75 Days
Deficiency Judgments Allowed: Yes
Time Frame: Typically 4-7 Months
Public Notice: Notice of Default
Colorado operates as a title theory state, which means that a property title will remain in trust until the loan is paid in full. In the state, a title can be secured by a deed of trust but mortgages can serve as liens upon property. Both judicial and non-judicial foreclosures may be used in Colorado. However, the state primarily uses non-judicial foreclosure methods because they are faster to carry out. Unlike other states, the Governor appoints a Public Trustee for each non-judicial foreclosure in Colorado who will serve as an impartial third-party in handling the foreclosure process. In Colorado, a lender may file a lawsuit to recover any deficiency balance.
Types of Foreclosures Allowed in Colorado
Judicial foreclosures are allowed in Colorado. This type of foreclosure, also known as foreclosure by judicial sale, involves selling the defaulted property under court supervision. In order for a judicial foreclosure to be possible, the loan must not contain a power of sale clause.
To initiate foreclosure action, a lender must sue the borrower to obtain a court order to foreclose the property. After the court declares a foreclosure, the property will be sold at auction to the highest bidder.
The state of Colorado also allows for a non-judicial foreclosure, which is also known as foreclosure by power of sale. In order for non-judicial foreclosures in Colorado to be possible, the loan documents must contain a power of sale clause. This type of foreclosure does not require court supervision, but instead requires an election to foreclose, in which a borrower is notified of the foreclosure.
Non-judicial foreclosures may be processed in two ways. If the power of sale clause states a specific time, place, and outlines terms of sale, then the lender must follow the procedure that is stated. If there is no specification, then the following requirements must be met:
1. The lender must file a Notice of Election and Demand with the public trustee in the county in which the property is located before foreclosure can be initiated. The Public Trustee must record the notice within ten (10) business days after the notice is filed. A copy of the notice must then be published at least once a week for five (5) consecutive weeks in a newspaper that circulates in the county where the property is located. The notice must also be mailed to the borrower at least twenty (20) days after the first publication. In addition, a notice of sale must be recorded where the property is located.
2. The notice of sale must include the date, time and place of sale, a description of the property, the lenders election to sell and the recording information from the deed of trust. The borrower can stop foreclosure by filing an intent to cure notice with the Public Trustee within (15) days before the foreclosure sale as long as the loan is made current by noon on the day before the scheduled sale date.
3. Foreclosure sales must occur within 45-60 days of the initial filing of the Notice of Election and Demand. A process referred to as a Rule 120 hearing must occur before the sale date to determine if the filing is legally sufficient. The hearing may be cancelled if the borrower does not respond after being issued a notice of the hearing.
Working with a Foreclosure Lawyer in Colorado
Receiving a foreclosure notice is not easy. However, there is help available for all mortgagors in the state of Colorado. Turn to a top foreclosure attorney if you have fallen behind on your payments or if you have already received a notice of default.
Foreclosure lawyers do whatever it takes to make sure you don’t lose your home. They will speak to your lender to try and work out an agreement in which everyone is satisfied. Your foreclosure lawyer may suggest mortgage modification, refinancing or even a temporary stop in payment to allow you to satisfy your loan. Rest assured that when you work with a leading team of foreclosure attorneys in Colorado, your case will end with the best possible outcome.
Regardless of your reason for defaulting, as a homeowner in Colorado, you have rights. Contact a foreclosure lawyer right now to prevent your home from being repossessed.