There are two types of foreclosures – judicial & nonjudicial. In Colorado, almost all foreclosures are non-judicial, which means is does not go through a court. This article will walk you through what that means for the foreclosure process and procedures, your rights and protections in the process, and whether you’ll be liable for a deficiency after the foreclosure sale.
Process and Procedures
In a Colorado nonjudicial foreclosure, the homeowner will receive several notices. These notices are explained in more detail below.
- Pre-Foreclosure Notice: 30-days after you default on your payment, the foreclosing party must mail the you a notice of their intent to foreclose. An additional 30 days after that, the foreclosing party will file a Notice of Election and Demand.
- Notice of Election and Demand: To start the foreclosure, the foreclosing party’s attorney submits the foreclosure documents, including a Notice of Election and Demand (NED), to the public trustee.
Rights and Protections
From this point, you will have no less than 110, and no more than 125, calendar days to stop the foreclosure before it is finalized. The process will proceed in this fashion:
- Notice of Opportunity for Foreclosure Deferment: The good news is Colorado law allows some borrowers to delay the foreclosure for up to 90 additional days.
- Within 15 days after the submission of the NED, the foreclosing party must personally serve or post a deferment notice on your property. This notice will usually appear on the front door. This notice will inform you of your opportunity to get a deferment, as well as the procedures involved to get one.
- Combined Notice of Sale and Right to Cure and Redeem: The public trustee will mail you a combined Notice of Sale and Right to Cure and Redeem two separate times. These documents include the date and place of the sale.
- The public trustee publishes the notice in a newspaper.
- Notice of Rule 120 hHearing: Notice of the Rule 120 hearing will be mailed to you, as well as posted on the property, 14 days prior to your hearing date. If you do not respond to the notice with a dispute, the court will cancel the hearing and authorize the sale.
Right to Redeem
In some states, you can repurchase your home soon after the foreclosure. However, in Colorado, foreclosed homeowners cannot redeem the home following the foreclosure.
Notice to Leave
After a foreclosure in Colorado, the purchaser must make a demand for possession. If the borrower does not vacate, the purchaser can initiate an eviction lawsuit.
Colorado’s Deficiency Law
When the total mortgage debt is larger than the sale price of the foreclosed home, the difference is called a deficiency. Colorado will allow the lender to seek a deficiency judgment against you for this amount for up to six years after the sale. This means even though you no longer own the property and aren’t living in it, you might still be required to make payments on the house.
The simplest solution to all of this is to avoid letting the foreclosure be finalized. One way to avoid foreclosure is to sell your house before the foreclosure is complete. You can list it on the market, but it likely will take months to sell. Finding a cash buyer is the quickest way to sell a house and requires no repairs or clean up from you.
If you are trying to avoid foreclosure and need to sell you house fast, Colorado All Cash can give you a fair, cash offer on your house instantly. Just fill out the cash home buyer form and someone will be in contact with you right away! We’re eager to assist you with all of your financial issues.