Colorado Foreclosure Process

When you get that amazing opportunity to purchase your first house, you never stop to consider the possibility that you may lose the ability to pay for it. Owning a home can be a very enjoyable experience, but it can be very stressful as well.  This is especially true if you can no longer make your mortgage payments

Say what?

“Foreclosure” is one of those words that seems so foreign to most of us, but what would you do if you lost your job tomorrow?  Would that significantly impact your ability to make your mortgage payment?This situation happens to great people every day through no fault of their own. They are told that it “isn’t personal and it’s strictly business.”  That sounds great, but it sure does nothing to help you pay your bills.This situation has impacted several families that I know well and they too never thought about it either before it happened to them.  They currently live in Colorado and the foreclosure process does vary from State to State.

Let’s talk about the current process in Colorado.

If a resident fails to pay his or her mortgage after a period of 3 to 5 months, the foreclosure process may begin. If a court declares your home in foreclosure, it is going to be auctioned off to the highest bidder. In another process that leads to the same outcome, the borrower pre-authorizes the liquidation of their home in the event that they cannot pay the lender in an acceptable and timely manner.

I realize that this is a scary thought, but it is always easier to be proactive with your payments and just avoid foreclosure. Pueblo is the city that my friends live in and 1 in 1,059 families find themselves in this situation. Although you may not be in this situation now, you certainly could be and it is helpful to know the process.

Colorado appoints a public trustee to impartially handle all foreclosure cases. When the courts are not involved, this process is initiated by a lawyer that represents the lender. The public trustee is then required to file a ‘Notice of Election and Demand’ with the county clerk and the recorder. After it’s recorded, the notice must be printed in the local paper for 5 consecutive weeks. The public trustee also has to mail this notice to the borrower within 10 days. Finally, the trustee has to also mail instructions on redeeming the property to the borrower 21 days or sooner, than the foreclosure sale.

Sometimes, circumstances in life happen that we cannot control so good people simply can’t stop this process from the beginning. If the borrowers can generate the income needed to catch up on their mortgage payments, there is a process that effectively can stop foreclosure. Pueblo is just an example of a city where the foreclosure process challenges people from all income levels and walks of life. This situation happens in every city all across the country, but the process described here is specific to this area.

A borrower in Colorado can halt a foreclosure by filing an ‘Intent to Cure’ with the trustee’s office 15 days before the sale or even sooner. The balance can be paid by noon on the day before the sale to avoid any interest charges. The buyer has a maximum of 75 days after the foreclosure sale to pay the balance with interest before ultimately losing the property. I have learned to expect the best and prepare for the worst with all things in life. Although this may all seem unlikely, this could happen to you. If you find yourself in this situation, you now have the facts, timelines, and an understanding the process that is headed your way.