Fast and Furious Foreclosures

January, 2004

Foreclosures in the United States and Colorado are increasing at an alarming rate. In 2002, the number of foreclosures in the United States was the highest since 1991. Foreclosures in the Denver metro area have increased 46% from a year ago. In light of such a staggering rise, a general understanding the Colorado’s foreclosure process has become increasingly important to numerous parties.

Generally, the Colorado foreclosure process begins when a creditor or lender declares a default by the debtor and elects to advertise all or a portion of the property for sale at a public auction by filing two documents with the public trustee: 1) Notice of Election and 2) Demand for Sale. The public trustee then commences the foreclosure proceeding within ten working days and sets the foreclosure sale date between forty-five and sixty days after the date of recording the two documents.

The public trustee also publishes a Notice of Sale once a week for five successive weeks advertising the property sale date. Within twenty days of the first publication, the public trustee mails a copy of the Notice of Sale and a Notice of Right to Cure and Right to Redeem to the owner and to each person who may have an interest in the property. This latter document indicates that the owner or any interested party has a statutory right and requirement to file a Notice of Intent to Redeem/Cure within fifteen calendar days prior the sale date.

Before the sale, a limited hearing must be scheduled to legally establish whether the creditor has the right to foreclose on the property and have it sold at a public auction. This hearing, known as a Rule 120 Hearing, must be held in time to allow the debtor at least seven days after the hearing to file a Notice of Intent to Redeem/Cure before the foreclosure sale.

The creditor must also deliver a written statement indicating the monetary amount necessary to cure the default on or before noon on the seventh calendar day before the sale date or the sale may be postponed for up to two weeks. The creditor may then extend the sale date to accommodate negotiations or procedural compliance, but usually the sale must be completed within six months of the original sale date. After the auction, a seventy-five day redemption period occurs during which time the owner may file a Notice of Intent to Redeem the property.

There is no guarantee that the information provided in this Legal Update is current, accurate, complete, or is applicable to your particular circumstances. You should not rely on any information provided in this Legal Update or its applicability to any particular facts or circumstances without first seeking legal or other professional advice. For more information on this subject, please contact Jay Kamlet at (303) 825-4200.