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The foreclosure process in Colorado is no longer the issue that it once was. In the fourth quarter of 2017, completed foreclosures fell 29.4 percent compared to the same time in 2016.
Unfortunately, foreclosures still happen. But the process isn’t as esoteric as it appears from the outside.
In fact, by learning how foreclosures work in Colorado – and the laws governing the filing – you may even be able to save your house from foreclosure.
Here’s what you need to know about going into foreclosure in the state of Colorado.
A Simple Guide to the Colorado Foreclosure Process
Colorado Foreclosure Process Timeline
Let’s start with the timeline. While some foreclosures are swift and simple sales, the majority follow a similar calendar to the one below:
Missed Payment – 1 day
The process begins the day you miss a payment – no earlier, no later.
Day 1 is the day you fail to make a payment. From here, you enter into delinquency. If you’re unable to make the payment within a calendar month, you’ll move into the second phase: delinquency.
Demand Letter – 45-60 days
Once in delinquency, you’re on your way to a demand letter. The date of the letter depends upon your lender’s practices.
Expect a letter demanding the missed payment somewhere between 45 and 60 days after your payments due date.
Foreclosure Filing – 118 days
Failing to make a payment on your mortgage for 90 days in Colorado leads to a foreclosure filing.
The foreclosure phase begins at day 118.
Default Judgment, Sheriff’s Sale, Confirmation – 118 -150 days
Things begin to move swiftly once day 118 arrives. From here, homeowners can expect their default judgment followed by a sheriff’s sale and confirmation of foreclosure potentially within 30 days. However, the process is complicated and may take substantially longer.
Eviction – 150+ days
Once the house sells, you may be evicted.
A Simple Guide to the Colorado Foreclosure Process
Ways To Stop Foreclosure In Colorado
Just because you’ve reached the beginnings of the foreclosure process doesn’t mean all is lost.
The foreclosure process in Colorado only begins once your lender files a proceeds demand known as a Notice of Election or Demand (NED). Once the NED is registered with the Public Trustee, you still have 110-125 days to start making regular payments again.
If your failure to pay was a temporary blip, don’t despair. As long as you can catch up during this time frame, then you can halt the foreclosure process.
The Basics of the Foreclosure Process
It’s important to go through a few fundamental concepts to better understand the foreclosure process:
First, let’s discuss the types of foreclosures that occur: judicial and nonjudicial. As you might expect, a judicial foreclosure requires the lender to foreclose on the homeowner by going through the courts. Nonjudicial foreclosure is initiated and completed by the lender, and it’s allowed because of a clause found in the original mortgage agreement.
In Colorado, most foreclosures are nonjudicial, but both types are legal. Colorado differs from other states because other states choose a kind of foreclosure while banning the other.
How Does Nonjudicial Foreclosure Work?
A nonjudicial foreclosure begins when the party foreclosing on the property (often your lender) files proof that it owns the debt with the public trustee.
Once this is done, the party holding the mortgage has to head to court. The process follows the Rule 120 proceeding schedule, which authorizes the sale of the property.
The mortgage holder then gives the public trustee their copy of the sale order before the scheduled sale.
What Is a Public Trustee?
One word has come up a few times in this article, and it may be one you’re unfamiliar with: public trustee.
Another of the ways the Colorado foreclosure process is unique compared to other states is that it allows nonjudicial foreclosures and a public trustee is used.
The public trustee is a public official who works for the city or county. Their role includes:
- Walking homeowners through the foreclosure process
- Giving homeowners a list of resources
- Showing homeowners who they can cure their foreclosure
There are some limits. You can’t appeal to a public trustee nor can they administer any debt mitigation agreement. In fact, they can’t provide any legal advice whatsoever to any homeowner they’re in contact with.
Any resources provided are limited to names and phone numbers of external parties.
Is Anyone Exempt from the Mortgage Foreclosure Process Under CO Law?
Generally, no.
However, state law allows for specific protections for members of the National Guard when they’re serving on active duty for over 30 days.
The law cited is Colo. Rev. Stat 28-3-1406. It doesn’t require the service to be performed abroad: both military and state defense force active duty count.
How Can I Save My House From Foreclosure?
The first way to stop a foreclosure is always through negotiating with your lender. If your lender says no, then the state of Colorado offers a section option called “curing.”
A cure means that someone pays for past payments owed (and due), fees, interest, and any costs associated with the foreclosure process.
To participate, you’ll need to file an “Intent to Cure” form with your local city or county Public Trustee for pueblo public trustee go here.. You must sign it in front of the office staff. If you can’t make it to the office, then the form must be notarized.
An Intent to Cure form is free to file – and it could help you if you submit the form a minimum of 15 days before the auction date.
Once the cure is filed, Public trustee and the lender negotiate. If they agree on a payment, you’ll have the opportunity to “cure” your property by paying the fee in full before the auction date.
Fast Facts About the Foreclosure Process in CO
If you’ve made it this far, let’s recap what you need to know about your Colorado foreclosure:
- The average timeline of foreclosure in Colorado is four months.
- Both a mortgage and deed of trust can be foreclosed upon.
- Colorado allows a right of redemption and deficiency judgments – you can save your house.
- Both judicial and non-judicial foreclosures are legal.
Save or Sell Your House?
If you’ve entered into the foreclosure process, then something’s gone wrong. In some cases, it’s better to save your house to sell it on and get out of a property you can’t afford as soon as possible.
Do you have questions about foreclosure or selling your home? Contact us to learn more about selling homes fast – and even receive a cash offer