Old Foreclosure Law In Colorado
The information provided below pertains to foreclosures with a Notice of Election and Demand PRIOR TO 1 January 2008.
For information on foreclosures with a Notice of Election and Demand AFTER 1 January 2008 Click Here
The following information is made available by Brian L. A Wess as a public service and is issued to inform, not to advise. No person should attempt to interpret or apply any law without the assistance of an attorney. The information provided here has been gathered from multiple sources and opinions expressed in this communication are those of the authors and not those of Brian L. A. Wess or his affiliates. Additional information about the Colorado foreclosure process can be obtained from the Colorado Revised Statutes, Articles 37, 38, and 39.
If you need advice on this or any other legal problem, contact an attorney of your own choosing. If you cannot afford an attorney, contact Colorado Legal Services: 303-837-1321.
If your property is nearing or is in foreclosure you can contact the Colorado Foreclosure Helpline at 877-601-HOPE (4673)
The Foreclosure Process Prior to 1 January 2008
Prior to Sale, After the required documentation is received by the Office of the Public Trustee, the Public Trustee files a Notice of Election and Demand with the local Clerk and Recorder.
The foreclosure sale is set between 45 and 60 days after the date of the Notice of Election and Demand. The foreclosure sale is published in a general circulation newspaper for five consecutive weeks.
Before the sale, the owner of the property has an opportunity to cure the default on the property by filing an Intent to Cure with the Public Trustees office. The intent to cure must be filed at least 15 days prior to the sale. The owner must cure the default on the property by 12 noon on the day before the foreclosure sale.
Often, a property will not go to sale on its originally scheduled date because the foreclosing attorney has not filed a bid or because an owner has filed bankruptcy. Filing of a bankruptcy by the owner of the property stops the foreclosure until the automatic stay is lifted, the bankruptcy by the bankruptcy court abandons the property, or the bankruptcy case is dismissed or closed. The foreclosure sale date extends week to week until the Bankruptcy Court takes action.
A property that has not gone to sale on its originally scheduled date is listed as being continued. A property can be continued for up to six months by the foreclosing attorney at which time the attorney must withdraw the foreclosure. Properties that are part of a bankruptcy proceeding can be continued indefinitely.
The foreclosing lender must produce a written bid no later than noon on the Tuesday before the Public Trustee sale. If a written bid is not received from the lender for a property set for sale, then the property is continued for at least one week. Parties interested in bidding must bid $50 over the lenders bid, which is read aloud at the time of sale. The bidding is competitive and done orally with the highest bidder winning.
A Certificate of Purchase is issued to the highest bidder. Successful bidders must present cash or certified funds by 1 p.m. on the date of the sale for the exact amount of their bid. A duplicate Certificate of Purchase is recorded with the County Clerk and Recorder within ten days of the sale. The interest under the Certificate of Purchase is fully assignable.
After the Foreclosure Sale
An owner has 75 days after the sale to redeem his property. If the property is agricultural, this redemption period is extended to six months. An owner intending to redeem his property needs to file a written intent to redeem by day 60 of the owner redemption period. The Public Trustee will then obtain a redemption amount which will be for the amount that the property was sold for at sale, per diem interest at the default rate of the note, and any other expenses allowed by law.
An owner must present the redemption amount in cash or certified funds to the Public Trustee by the close of business on the final day of redemption. In an owner redemption, the sale is annulled and the owner retains title to the property subject to all liens and encumbrances of record except for the deed of trust that was foreclosed upon (the owner has paid off this deed upon redemption).
Junior Lein Holders
For junior lienholders, the redemption period begins after the owner redemption period has expired. The first junior lien holder has ten days to redeem the property and each subsequent junior lien holder then has five additional days to redeem the property. Intents to redeem by a junior lien holder must be filed with the Public Trustee by day 60 of the owner redemption period. In junior lien holder redemptions, the junior lien holder must have a recorded interest in the property prior to day 60 of the owner redemption period. There is a $50 fee to file an intent to redeem and the junior lien holder must present a copy of the recorded interest in the foreclosed property.
If there is an Internal Revenue Service (IRS) lien against the property, the IRS must file an intent to redeem with the County Public Trustee's Office and must follow the junior lienholder redemption process outlined in the state statutes. The IRS also has a 120-day federal redemption right which begins on the last day of the owner redemption period. If the IRS redeems under federal law, the Public Trustees office is not involved in this redemption (i.e., issuing a certificate of redemption). If the United States Government has a lien on the property (Small Business Administration or U.S. Treasurynot IRS), then the U.S. government is granted a one year redemption period and does not have to file an intent to redeem with the Office of the Public Trustee.
A redeeming lien holder must present the redemption amount in cash or certified funds to the Public Trustee by the close of business on the final day of his redemption period. The Public Trustee cannot accept late redemption proceeds. A certificate of purchase holder may pass on certain expenses to a redeeming lien holder. A junior lien holder may only include the expense of insurance for the days that he holds the property.
A Certificate of Redemption is issued to the party redeeming the property from the foreclosure. This redemption interest is fully assignable. A Public Trustees Deed is issued to the holder of the Certificate of Purchase if there has been no owner redemption and no other intents to redeem were filed or the Public Trustees Deed is issued to the last redeeming junior lien holder after the expiration of all redemption periods. In both instances, title vests free and clear of all liens and encumbrances junior to the foreclosed lien except omitted parties - parties that were not notified of the foreclosure but who have an interest in the property.