A foreclosure occurs when a borrower has defaulted on a loan that is secured by the Deed of Trust.
The foreclosing attorney, who represents the lender, files the required documentation set by the Colorado Revised Statute 38-38-101, with the Office of the Public Trustee of the county where the property is located.
After the office of the Public Trustee receives the required documents, the Public Trustee files a Notice of Election and Demand with the Clerk and Recorder of the County. The foreclosure sale date for non-agricultural property is set between 110 and 125 calendar days after the recording of the Notice of Election and Demand, for agricultural property the sale date is set between 215 and 230 calendar days. Agricultural property is based on assessment by the County Assessors Office. The Combined Notice of Rights to Cure or Redeem is published in a general circulation newspaper for five consecutive weeks.
Before the sale, the owner of the property or junior lienor has the opportunity to Cure the Default on the property by filing an Intent to Cure with the Public Trustee's office. The Intent to Cure must be filed fifteen (15) days prior to the scheduled foreclosure sale date. A junior lienor may cure the default on the property, under certain circumstances. The owner or junior lienor must present the necessary amount to Cure the Default (bring the loan current) by 12 noon the day before the scheduled foreclosure sale.
Often, a property will not go to sale on the originally scheduled sale date. The foreclosure sale for that property is said to be “continued”. This may happen for several reasons:
The foreclosing attorney did not provide the written bid to the Public Trustee in the required time frame.
The owner has filed bankruptcy and the foreclosure process is stopped. The foreclosure is said to be “Stayed by Bankruptcy”. The court must issue an order “Lifting the Stay” before the Public Trustee can proceed with the foreclosure.
The lender/foreclosing attorney can continue the sale for up to twelve (12) months unless the property is Stayed by Bankruptcy. Property that is Stayed by Bankruptcy can be continued indefinitely. After the twelve (12) months, property that has not been Stayed by Bankruptcy must be withdrawn from the office of the Public Trustee. Lists of properties that have been withdrawn and/or continued are available at the Office of the Public Trustee on the day of sale.
The lender, through the foreclosing attorney, must submit a written bid no later than 12 noon two (2) business days before the scheduled date. If a bid is not received the sale is continued a week.
Bids are available after 2:00pm two (2) business days prior to the scheduled sale date. The foreclosing attorney/lender may pull or amend the bid as late as sale time on the date of sale.
Parties interested in bidding must complete a bidder information sheet and must bid at least One-hundred ($100) over the lender's beginning bid. The bidding is competitive and oral with the highest bidder winning.
The full bid amount must be presented to the Office of the Public Trustee at the time of sale and must be in the form of cash, cashiers check, bank check or certified funds. If you intend to do a wire transfer, arrangements must be made prior to sale time.
A Certificate of Purchase is issued to the highest bidder erecorded with the Clerk and Recorder. The Certificate of Purchase is fully assignable.
The foreclosing lender, through their attorney, may rescind the sale without a court order by filing a signed Notice of Rescission with the Public Trustee within eight (8) business days after the date of sale only if the property was not sold to a third party bidder.
The owner no longer has the right to redeem the property after the date of sale; therefore they cannot file an Intent to Redeem.
A Public Trustee Confirmation Deed is issued to the holder of the Certificate of Purchase if there has been no junior lienor intents filed. Eight (8) business days after the date of sale, the Certificate of Purchase holder, will be notified that all redemption periods have expired and they may request a Public Trustee Confirmation Deed be issued. There is a forty-one ($41) dollar Confirmation Deed fee. The Confirmation Deed will be issued and e-recorded no earlier than fifteen (15) business days after the date of sale.
A Junior Lienor may file an intent to redeem at the office of the Pubic Trustee and pay a fifty dollar ($50) filing fee. The lien must be recorded prior to the recording of the Notice of Election and Demand for Sale in order to redeem. All intents to redeem by a junior lienor must be filed no later than eight (8) business days after the date of sale.
The first junior lienor will have five (5) business days to redeem the property but no later than 12 noon of the final day.Each subsequent junior lienor will have the same time frame of five (5) business days. The liens are placed in order by the recording date of the lien, not by the date the of the lien, the date the intent was filed or the date it was assigned.
The junior lienor who has filed an intent to redeem must present their funds to the Public Trustee within their redemption time. A Certificate of Redemption is issued to the redeeming lienor and is e-recorded with the Clerk and Recorder's office. The Certificate of Redemption is fully assignable. A forty-one dollar ($41) Certificate of Redemption fee is added to the redemption amount.
The title vests free, and clears all liens and encumbrances junior to the foreclosed lien.
When there is an IRS lien against the property, the IRS may redeem under both the Colorado Revised Statues and the Federal Statues. If the IRS file an Intent as a Junior Lienor under the C.R.S, they will be allowed the same redemption rights as other junior lienors. If the United States Government has a lien on the property (Small Business Administration), the U.S. Government is granted a one (1) year redemption period.
Additional information about the foreclosure process can be obtained from the Colorado Revised Statutes, Articles 37,38 and 39.