Home Foreclosure in Colorado
What happens when my home is in foreclosure? In Colorado, the process is predictable and there are some important parts that all homeowners should know.
If you do not make your house payments on time, in Colorado, the mortgage lender has the right foreclose. Foreclosures on homes in Colorado are usually conducted by the office of the Public Trustee of the county where you live. In a public trustee foreclosure, your home will be sold in an auction and the proceeds of the sale will be paid towards the unpaid balance of your mortgage. If sale proceeds are not enough to pay off the mortgage, the lender may sue you for the balance. If you are thinking about filing bankruptcy and want to keep your home, your bankruptcy petition must be filed before the foreclosure sale.
Before your lender may start the foreclosure process, it must give you notice that you are in default, that unless you cure the default by a certain date ( a 30-day written notice of right to cure the default), and that if you do not cure the default, the entire balance of the mortgage will become due. Notice of default and acceleration will usually come in the mail, from the office of a local attorney representing the mortgage lender. After that notice of default and acceleration, the lender's attorney will file a notice of election and demand with the office of the Public Trustee of your county. Many counties in Colorado have their records of foreclosure easily accessible on-line, so that you can see the process from start to finish.
Once the notice of election and demand has been filed with the public trustee, the trustee will schedule a date for the sale. The date of the foreclosure sale will be no less than 110 and no more than 125 days later. Until your home is sold at that auction and a deed is given to the new owner, you are the owner and may live in it, sell it, rent it out, or do anything else that an owner of property can do. During that 4 month period of time, the public trustee must publish notice of the foreclosure sale in the newspaper. Also, the lender must file a court proceeding, called a Rule 120, in which the lender must prove that you are actually in default. Filing a bankruptcy petition, before the sale, will stop the foreclosure process (at least, temporarily).
As the owner of your home, you have the right to cure a default in payments, up until noon of the day before the date of foreclosure sale. In order to cure the default, you must first give written notice to the public trustee of your intention to cure, no later than 15 days before the date of the foreclosure sale. Each public trustee has their own form for giving notice of intent to cure which must be completed and delivered to the trustee's office, no later than 15 days before the sale date. In a chapter 13 bankruptcy, the amount required to cure the default will be included in the chapter 13 plan and paid in monthly installments over a 3 to 5 year period.
Once you have filed with the public trustee your written notice of intent to cure, the public trustee will promptly send that notice to the lender or lender's attorney and request a statement of all sums necessary to cure the default. The lender must file a statement with the public trustee of: the total amount of late payments, accrued late charges, other amounts due under the mortgage, and costs and attorney fees incurred in the foreclosure process. The public trustee may add costs incurred by his office. Although the lender gave notice that the balance of the mortgage was due, cure of the default will include only the missed payments, plus costs and attorney's fees.
You, as the owner of the home, have a right to pay to the public trustee the amount for cure, on or before noon of the day before the foreclosure sale; payment must be made in good funds (Usually a cashier's check or certified check will be required, but each public trustee will have a policy regarding the form of payment). Once you have made that payment, you have a right to receive from the lender's attorney copies of receipts or other evidence of the costs incurred. The lender must provide those requested documents within 90 days. Upon successful cure of the default, the foreclosure will be dismissed. Upon successful completion of a chapter 13 bankruptcy, the default in payments on your home will be cured.
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The statements of law made here are general statements of law, effective at the time published and subject to change from time to time. These statements are not intended, nor may they be construed, to be applicable to any particular set of factual circumstances nor to any particular person. I recommend that all readers seek the assistance and advice of an experienced bankruptcy lawyer for guidance in their particular circumstances.
© Copyright 2013 David C. Hoskins, licensed Colorado lawyer