Colorado Foreclosure Law

In Colorado, foreclosure can be carried out on mortgages and deeds of trust in default. The state allows both judicial and non-judicial foreclosure processes. The timeline varies from case to case, but generally lasts about four months.

Judicial foreclosure
If the mortgage does not include a Power of Sale clause, the lender follows a judicial foreclosure process. The clause gives lenders the right to sell the property in order to pay off the loan if the borrower defaults. Without the clause, the lender has to take the case to court and obtain a court order before they can foreclose. In a judicial foreclosure, the court sets the time, date, and place of the sale, and the home is sold to the highest bidder.

Non-judicial foreclosure
Unlike most states, Colorado does not follow the terms specified in the Power of Sale, and does not extend the power to the lender’s trustee. Instead, the state appoints a Public Trustee to each county, who will then be responsible for carrying out the foreclosure as an impartial party.

A Colorado non-judicial foreclosure begins when the lender files a notice at the Office of the Public Trustee in the county where the home is located. After receiving the notice, the Public Trustee records a “Notice of Election and Demand” with the county recorder. The notice must then be published in a local newspaper for at least five consecutive weeks, and a copy of the notice will be mailed to the borrower and other concerned parties within ten days.

At least 15 days before the sale date, the borrower can file an “Intent to Cure” with the Public Trustee. The document states that the borrower intends to settle the account before the sale. This stops the foreclosure proceedings and gives the borrower a short time frame to bring the mortgage current. The debt must be paid by noon of the day before the sale; otherwise, the Public Trustee proceeds with the foreclosure

The sale date is set anywhere from 45 to 60 days after the Notice of Election and Demand is recorded. The auction can be held at a public entrance to the county courthouse, unless the deed of trust specifies otherwise.

Right of Redemption and deficiency claims
After the home is sold, the borrower is given a 75-day Right of Redemption. This means he has 75 days to redeem his home by paying the same amount paid at the foreclosure, as well as interest. Lenders can also file a deficiency suit, a claim against the borrower, if the foreclosure does not cover the entire amount owed.

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