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
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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.
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Foreclosure
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