The majority of Colorado foreclosures are completed through the state’s unique public trustee system, which is different from all other states. If you're a homeowner facing foreclosure in Colorado, you probably have many questions about what this means for you. For example: How does the Colorado public trustee foreclosure process work? How much notice will you get before the foreclosure sale takes place? Does Colorado allow you catch up on the past-due amounts to stop the foreclosure? Can the foreclosing party get a deficiency judgment after a Colorado foreclosure?
To get answers to these questions and more, keep reading. Below you’ll find a summary of some of the key features of Colorado’s foreclosure law along with citations to the statutes so you can read the law yourself.
The citations to Colorado foreclosure statutes are: Colorado Revised Statutes Sections 38-38-100.3 through 38-38-114.
You can find a link to the Colorado Revised Statutes on the Colorado General Assembly’s website at www.leg.state.co.us. If you need help finding the statutes, see Finding Your State’s Foreclosure Laws.
We’ve summarized important parts of Colorado foreclosure laws below. You can find more detailed articles on various aspects of Colorado foreclosure law in Nolo’s Colorado Foreclosure Law Center.
Most foreclosures in Colorado are nonjudicial, which means they happen outside of court (as opposed to judicial foreclosures, which go through the court system). However, Colorado uses a process that is different than other states when it comes to nonjudicial foreclosures. In Colorado, a county public trustee administers the foreclosure (whereas in other nonjudicial foreclosure states, a private trustee handles the process) and there is also some minimal court involvement in the foreclosure.
Court involvement in a Colorado nonjudicial foreclosure. A court’s only involvement in a Colorado nonjudicial foreclosure is when the attorney representing the foreclosing party files a motion under Rule 120 of the Colorado Rules of Civil Procedure asking a court for an order authorizing the foreclosure sale by the public trustee. The court sets a hearing (called a "Rule 120 hearing"), which is limited to an inquiry of whether the borrower is in default or in the military and subject to protections under the Servicemembers Civil Relief Act. Since neither of these issues is typically in dispute, the Rule 120 hearing often doesn’t need to take place and the court enters the requested order.
In a Colorado nonjudicial foreclosure, the homeowner will receive several notices. These notices are explained in more detail below, along with some additional information about the foreclosure process.
Pre-foreclosure notice. In Colorado, 30 days before filing the Notice of Election and Demand (the first official step in a Colorado foreclosure) and at least thirty days after default, the foreclosing party must mail the borrower a notice containing the phone number for the state foreclosure hotline and a direct phone number for the foreclosing party’s loss mitigation department. Colo. Rev. Stat. § 38-38-102.5.
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. Colo. Rev. Stat. § 38-38-101. The public trustee records the NED with the county clerk and recorder. Colo. Rev. Stat. § 38-38-102.
The public trustee sets the sale date to take place not less than 110 calendar days and not more than 125 calendar days from the recording date of the NED. (If the property is agricultural, this time frame becomes 215 to 230 days.) Colo. Rev. Stat. § 38-38-108.
Notice of opportunity for foreclosure deferment. Colorado law permits certain borrowers in foreclosure to defer (delay) the foreclosure for up to 90 days. Colo. Rev. Stat. § 38-38-801.
Within 15 days after the foreclosing party gives the foreclosure documents to the public trustee, the foreclosing party or its attorney must personally serve or post a deferment notice in a conspicuous place on the borrower’s property (usually the front door). The notice must contain information about the opportunity to get a deferment and the procedures to get one. Colo. Rev. Stat. § 38-38-802. The deferment law is set to sunset (end) on September 1, 2015. (For a summary of the foreclosure deferment law in Colorado, see Colorado Law Allows Homeowners to Delay Foreclosure.)
Combined Notice of Sale and Right to Cure and Redeem. The public trustee mails a combined Notice of Sale and Right to Cure and Redeem (which includes the date and place of sale, among other things) to the borrower at two separate times. Colo. Rev. Stat. § 38-38-103.
The public trustee also publishes the notice in a newspaper. § 38-38-103.
Notice of Rule 120 hearing. Notice of the Rule 120 hearing must be mailed to the borrower and posted on the property not less than 14 days prior to the hearing date. If the borrower doesn’t respond to the notice to dispute the foreclosing party’s right to sell the home (on grounds within the scope of the hearing), the court will cancel the hearing and authorize the sale. Colo. R. Civ. P. 120., Colo. Rev. Stat. § 38-38-105.
Colorado law provides protections against foreclosure for National Guard members when called to state military service or called to state defense force active duty for over 30 days. Colo. Rev. Stat. § 28-3-1406.
“Reinstating” is when you catch up on the missed payments (plus fees and costs) in order to stop a foreclosure. (Learn more about reinstatement to avoid foreclosure.)
In Colorado, the borrower can cure the default and reinstate the loan prior to the sale. To do this, the borrower must file a notice of intent to cure with the trustee at least 15 days prior to the sale date and then pay the total amount due to the public trustee before noon on the day before the sale. (If the figures in the cure statement have expired, but the last possible time to cure the default has not expired, you may request updated cure figures, though the request must received at least 15 days prior to the sale date.) Colo. Rev. Stat. § 38-38-104.
In some states, you can redeem (repurchase) your home within a certain period of time after the foreclosure. In Colorado, foreclosed homeowners cannot redeem the home following the foreclosure. Only junior lienholders may redeem after the sale. Colo. Rev. Stat. § 38-38-302. (To get details on redemption after a foreclosure in Colorado, see Nolo’s article If I lose my home to foreclosure in Colorado, can I get it back?)
When the total mortgage debt exceeds the foreclosure sale price, the difference is called a “deficiency.” Some states allow the lender to seek a personal judgment (called a “deficiency judgment”) against the borrower for this amount, while other states prohibit deficiency judgments with what are called anti-deficiency laws.
Colorado does not have an anti-deficiency law. The foreclosing party can obtain a deficiency judgment after a nonjudicial foreclosure by filing a separate lawsuit within six years. Colo. Rev. Stat § 4-3-118. However, if the lender does not bid the fair market value of the home at the foreclosure sale, the former homeowner may raise this as a defense in the deficiency action. Colo. Rev. Stat § 38-38-106. (For a summary of the deficiency laws in Colorado, see Colorado Laws on Post-Foreclosure Deficiency.)
After a Colorado foreclosure, the purchaser must make a demand for possession. If the borrower does not vacate (leave), the purchaser can initiate an eviction lawsuit.