Foreclosure is a process that can be confusing and intimidating for many homeowners. In Colorado, foreclosure laws differ in some ways from those in other states, making it essential for property owners to be familiar with the nuances of Colorado. This article aims to shed light on the fundamental aspects of foreclosure laws in Colorado, helping homeowners better navigate this challenging terrain.
Types of Foreclosures in Colorado
Colorado primarily employs two types of foreclosures: judicial and non-judicial.
- Judicial Foreclosure: This type involves the lender filing a lawsuit against the borrower if they fail to make mortgage payments. If the court favors the lender, they will issue a decree of sale, and the property will be sold at a public auction.
- Non-Judicial Foreclosure: The majority of foreclosures in Colorado are non-judicial. Here, the lender can proceed with foreclosure without filing a formal lawsuit, but only if the mortgage contains a “power of sale” clause. This clause allows the lender to sell the property if the borrower defaults on payments. The court is still involved in non-judicial disclosures but to a far lesser extent than judicial foreclosures.
Foreclosure Timeline in Colorado
The foreclosure timeline in Colorado can vary based on several factors, but generally, it follows these steps:
- Default: Once a borrower defaults on their loan by breaching the terms, often in the form of missing a payment, the lender might send out notifications or attempt to contact the borrower to rectify the situation.
- Notice of Election and Demand: After a certain period, the lender’s attorney will record a Notice of Election and Demand with the county public trustee. This notice starts the formal foreclosure process.
- Public Sale: Approximately 110-125 days after the Notice of Election and Demand is recorded, the public trustee will hold a sale, auctioning off the property to the highest bidder.
- Redemption Period: In some cases, borrowers or lien holders might have a chance to redeem the property by paying the full amount owed, including fees. However, this redemption period is not guaranteed and depends on specific circumstances.
Rights of the Borrower
Colorado law provides several rights to borrowers facing foreclosure:
- Right to Cure: Borrowers have a one-time right to cure default and stop foreclosure. To exercise this right, borrowers must submit the full amount due, including any fees, to the public trustee no later than 15 days before the scheduled sale date.
- Deficiency Judgments: If the property is sold for less than the outstanding mortgage amount, the lender can seek a deficiency judgment against the borrower for the difference. However, if the foreclosure is non-judicial, the lender cannot pursue a deficiency judgment.
- Notification: Colorado law requires lenders to provide borrowers specific notifications during foreclosure, ensuring they know their rights and the steps being taken.
At Baker Law Group, our dedicated Colorado Foreclosure Attorneys and Denver Foreclosure Lawyers have the experience and expertise to guide you through every step, ensuring your rights are protected. Don’t face a Colorado foreclosure alone; contact us today for a comprehensive consultation.