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A foreclosure occurs when a borrower has defaulted on a loan that is secured with a Deed of Trust on real property. The lender demands that their attorney foreclose on the defaulted deed of trust. The attorney orders a foreclosure certificate from a title company and prepares the paperwork to send to the proper Colorado County Public Trustee. The Public Trustee receives the Notice of Election and Demand for foreclosure and the accompanying documents. The Public Trustee has ten working days to record the Notice of Election and Demand (NED) for foreclosure. The foreclosure timeline starts when the Public Trustee records the NED in the County Clerk’s office. For NEDs filed after January 1 2008, the sale date is 110-125 days after the NED filing date (215-230 days for agricultural property). For NEDs filed prior to 2008, the sale date is 45-60 days after the NED filing date and longer for agricultural property. The homeowner must file a written Notice of Intent to Cure in the Public Trustee’s office no less that 15 days prior to the Sale Date. If the Notice of Intent to Cure is filed timely, the homeowner has until noon of the day before the sale to bring the payments current by paying the cure amount due to the Public Trustee in Certified Funds. The foreclosure is then withdrawn and the homeowner retains ownership of the property. Foreclosures can also have their auction postponed (or continued). This decision is made by the foreclosing lender. For NEDs filed prior to 2008, the maximum continuance is 6 months. For those filed 2008 and later, the maximum continuance is 9 months. Of course, bankruptcy can force a much longer continuance. If the foreclosed property goes to auction, the foreclosing lender issues the opening bid. Third parties are welcome to outbid the lender and must be present at the auction and follow the auction rules as outlined by each county's Public Trustee. The highest bidder (the lender if no third-party bid was made) will be issued a Certificate of Purchase by the Public Trustee. For foreclosures filed in 2008 or later, the homeowner has no more interest in the house after the sale. There is no homeowner redemption period. If the NED was filed before 2008, the homeowner normally has 75 days after the sale to redeem the foreclosure (to pay off the Certificate of Purchase amount plus interest and fees). Similar to an Intent to Cure, the homeowner must file an Intent to Redeem at least 15 days prior to the end of the homeowner redemption period. If a homeowner redeems, then the homeowner retains ownership of the property and no Public Trustee’s Deed is issued. Junior lienors with a recorded interest in the property can file their Notice of Intent to Redeem. Junior lienors who have filed Intents to Redeem have specific time periods to redeem following the sale (2008 and future NEDs) or the end of the owner’s redemption period (Prior to 2008 NEDs). If no one redeems, the Certificate of Purchase holder can be issued a confirming Public Trustee’s Deed following the expiration of all redemption periods. The last redeeming junior lienor can be issued a confirming Public Trustee’s Deed following the expiration of all redemption periods. |
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