Saturday, August 14, 2010

Colorado Foreclosure Laws

Here is what I've learned so far about Colorado Foreclosure Laws -- I am not an attorney and this is not legal advice, this is just a place for me to capture what I've learned.

Colorado is a "Deed of Trust (Semi-judicial)" state.  (Don't know what that means  but will find out).
Foreclosure Procedure is a Public Trustee's Sale.

Colorado foreclosures occur through both in-court and out-of-court proceedings. The most common process is managed by a public trustee out of court and takes about six months. 

Pre-foreclosure Period
The public trustee for each county is either appointed by the governor or elected by the public. The out-of-court foreclosure process begins when a lender files the appropriate documents with the public trustee to request a sale of the property. Once the public trustee officially records the foreclosure action, a foreclosure sale can be scheduled.

After the sale is scheduled, the lender still has to obtain a separate court order allowing the sale. The court schedules a hearing to consider the matter, and all affected parties are notified. If no one contests that the borrower is in default, the court allows the sale without a hearing.

If the borrower plans to pay off the default and stop the foreclosure, he or she needs to submit the intention to do this to the public trustee at least 15 days before the sale. If this is done, the borrower can pay off the default and discontinue the foreclosure process up until noon the day before the sale.

Notice of Sale / Auction
The public trustee schedules the sale 110-125 days after the initial foreclosure action was recorded. The notice of sale is published in a local newspaper for 12 weeks. The public trustee also mails a copy of the notice to the borrower.

The public trustee typically conducts the sale at the courthouse. At the sale, the public trustee reads the written bid submitted by the lender, and any party may bid.  If anyone other than the lender is the winning bidder, that person must deliver the bid amount in cash or cashier’s check to the public trustee. The winning bidder is given a certificate of purchase.

There is no longer any redemption period for the previous owner after a forecosure sale in Colorado.

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