Colorado Foreclosure
Law Summary
Quick Facts
- Judicial Foreclosure Available:
Yes
- Non-Judicial Foreclosure Available:
Yes
- Primary Security Instruments:
Deed of Trust, Mortgage
- Timeline: Typically four
months
- 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.
