Colorado Foreclosure Law: How the Foreclosure Process Affects You
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This section will review foreclosure laws in Colorado. Because foreclosure laws vary from state to state, it is important to understand how the Colorado foreclosure process works. Remember, when you consider buying a foreclosure, the state in which the property is located determines the laws regarding the property, not the state where the buyer may reside. In many cases buyers of foreclosed homes located in Colorado also live in Colorado. Be aware of how state foreclosure laws may impact your personal situation. You can learn a [no-glossary]lot[/no-glossary] about the system for foreclosure in Colorado in this section, but our information is not a substitute for professional legal advice. And because every state’s laws are subject to change without notice, we recommend you consult a real estate lawyer to gain a professional opinion of our information, and your interpretation of the information, as it applies to your specific real estate investment or home purchase situation.
Visit the Colorado law details below to learn about how Colorado foreclosure handles aspects of judicial or non-judicial availability, primary security instruments, foreclosure timelines and foreclosure filing milestones, guidelines for Power of Sale in Colorado, and application of deficiency judgments. We’ll help you understand these foreclosure law [no-glossary]terms[/no-glossary] and how Colorado applies them to the process. You may or may not need to navigate through Colorado’s laws in great detail during your purchase process, but smart foreclosure buyers find that learning a lot might help save a lot on a discount home purchase.
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
The Foreclosure Process in Colorado
Lenders in Colorado 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.
Regulations for Colorado Foreclosures
Power of Sale 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 5 consecutive weeks.
- The Public Trustee must also mail, within 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 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 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 45 and 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.
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