Colorado
Foreclosure Law Summary
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 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.
More information on Colorado foreclosure laws.
