Colorado Residential Foreclosure Process
Colorado subscribes to the title theory of home ownership. This states that the lending agent maintains ownership of the property until the mortgage contract has been fully satisfied. The trust deed confers ownership to the lender for the duration of the contract. The foreclosure process in Colorado generally takes 60 to 70 days to complete.
Other People Are Reading
-
Judicial Foreclosure
-
The judicial foreclosure process in Colorado requires the lending agent to file a lawsuit against the homeowner for the past due amounts. The court usually sets a deadline for the payment to be made. If the payment is not made by this deadline, then the court will issue an order to foreclose on the home and sell it to the highest bidder.
Nonjudicial Foreclosure
-
The lender also has the right to foreclose on a home without the need for a court order. This is done by including a power of sale clause in the mortgage contract. This clause gives the lender the right, once the loan is in default, to foreclose on the property. The lender typically appoints a representative, called a trustee, to oversee the foreclosure process.
-
Power of Sale Procedures
-
The power of sale clause generally establishes the guidelines for the foreclosure process to follow. In the event that this information is not present, then the state of Colorado's regulations take precedence. The lending agent must first file the foreclosure documentation with the county in which the home is located. Once this is done, the lender must take out an advertisement in the local paper at least once a week for five consecutive weeks. The borrower must receive a notice of foreclosure at least 21 days before the auction takes place. The sale must take place between 45 and 60 days from the date the paperwork is filed with the county.
Deficiency and Right of Redemption
-
A deficiency occurs when the home is sold for less than the balance due on the loan. In this case, the lending agent has the right to sue the homeowner for the deficient balance. The state of Colorado gives the homeowner one final opportunity to retain possession of the property after the sale is complete. This is done by paying the full balance of the loan, plus any foreclosure costs. The homeowner has 75 days from the auction date to exercise this right of redemption.
-
