The Colorado public trustee foreclosure, step by step

Bottom line first. A Colorado foreclosure that runs through the county public trustee is a slow, written, step-by-step process. The law sets the order and many of the minimum waiting times. You are not powerless inside it: the most important deadline for a homeowner is the day, 15 calendar days before the sale, by which a notice of intent to cure must be filed (Lesson 2). This lesson is general education, not legal advice. Your own dates depend on the dates printed on your own notices.

The cast of characters

A deed of trust is the paper you signed that lets the lender's side sell the home if the loan is not paid. The holder is whoever owns the debt, and the servicer is the company that collects your payments. The public trustee is a county official who runs the sale and keeps the records. The law also calls this person the officer. The evidence of debt is the loan paper itself, usually the promissory note.

Step 0: a warning letter before anything is filed

For a home loan where the only default is missed payments, the holder must mail you a notice at least 30 days before it files to foreclose, and at least 30 days after the default. The letter must list the phone number of the Colorado foreclosure hotline and the direct number of the holder's loss mitigation contact. It must also say that a foreclosure consultant is not allowed to charge an up-front fee (C.R.S. 38-38-102.5). Loss mitigation means the lender's programs to help you keep the home or leave it with less harm, such as a payment plan or a loan change.

Step 1: election and demand

The holder, usually through an attorney, files a notice of election and demand with the public trustee in your county. It is the lender's written statement that you broke the deed of trust and that it chooses to sell the property. With it come the original loan papers (or approved stand-ins), the recorded deed of trust, and the holder's draft of the combined notice (C.R.S. 38-38-101). The notice states the loan's outstanding principal balance and the promise in the loan that was broken. The public trustee reviews the filing and, if it is complete, records it within ten business days after receiving it (C.R.S. 38-38-102). Recording matters because many later dates are counted from it.

Step 2: the combined notice

The combined notice is one notice that tells you and others who have an interest in the property the key facts of the sale. The public trustee mails it no more than 20 calendar days after recording, and mails it again between 60 and 45 calendar days before the first scheduled sale date (C.R.S. 38-38-103). It is also printed in a newspaper once a week for five weeks in a row. It must tell you, among other things:

• that a notice of intent to cure must be filed at least 15 calendar days before the sale date, or before the date to which the sale is moved;
• that a notice of intent to redeem must be filed no later than eight business days after the sale;
• the date and place of the sale; and
• that you can complain to the Colorado attorney general or the federal Consumer Financial Protection Bureau (CFPB) if you think the servicer broke the rules about a single point of contact or "dual tracking", but that a complaint does not stop the foreclosure.

Step 3: the court order

Before a public trustee can sell, the holder must get a court order authorizing the sale under Colorado Rule of Civil Procedure 120. The order must record the hearing date, and that date must be no later than the day before the last day a notice of intent to cure may be filed. A sale held without a proper order is invalid (C.R.S. 38-38-105). The holder must also give the public trustee a copy of the order by noon on the second business day before the sale, or the trustee postpones the sale.

For a residential property, the holder must post a notice of the hearing on the property, on the front door if possible, not less than 14 days before the hearing. If someone at the home blocks the posting, the notice may be handed to that person. Ask the court clerk how the Rule 120 hearing works in your county.

Step 4: the sale date

For a home that is not agricultural, the first sale date falls no fewer than 110 and no more than 125 calendar days after the notice of election and demand is recorded (C.R.S. 38-38-108). The sale can be moved. The public trustee may continue it for good cause or at the holder's written request, and a sale not held on its date is treated as moved a week at a time. It cannot be moved later than twelve months from the original date in the combined notice, with limited exceptions (C.R.S. 38-38-109).

Step 5: the holder's bid

The holder submits a bid to the public trustee that must arrive no later than noon on the second business day before the sale; if it is late, the sale is moved a week (C.R.S. 38-38-106). The bid must be at least the holder's good-faith estimate of the home's market value, minus unpaid property taxes, minus liens that rank ahead of the loan, minus the estimated costs of holding and reselling the home. It never has to be more than the total owed to the holder. Anyone else who bids must pay at the sale, in a form the law allows.

Step 6: the sale

The sale is held at a courthouse door or room, or at a building that houses the clerk's or the trustee's office, as the combined notice says, or it may be held by internet (C.R.S. 38-38-110). The officer reads the sale number, the original borrower's name, the address, the holder, the dates of publication, and the bid amount and bidder. The winning bidder receives a certificate of purchase. That certificate is not yet a deed. A short window follows during which certain lien holders may redeem (Lesson 3).

Example with real numbers

These dates and dollars are made up to show the order. Jordan's loan payment is $1,850 a month, and Jordan has missed four, so $7,400 in payments is behind (4 x $1,850 = $7,400).

1. The lender sends the warning letter. The notice of election and demand is recorded Monday, March 2.
2. The first combined notice is mailed by March 22 (20 days after March 2).
3. Earliest sale date: March 2 + 110 days = June 20. Latest first date: March 2 + 125 days = July 5. Say the sale is set for Wednesday, July 1 (day 121).
4. Second mailing window: 60 to 45 days before July 1, so May 2 to May 17.
5. Last day to file a notice of intent to cure: July 1 minus 15 days = Tuesday, June 16. The court hearing date must be on or before June 15.
6. The holder's bid is due by noon on the second business day before July 1, which is Monday, June 29.

If the sale is moved a week to July 8, the cure deadline moves too, to June 23, because it is counted back from the sale date (C.R.S. 38-38-103 and 38-38-104). Always count from the date on your own notice.

What to do with this

Keep every envelope. Write the sale date and the cure deadline on a calendar. Call the foreclosure hotline named in your letter, and consider a free session with a HUD-approved housing counselor or a Colorado legal aid office. Be careful with anyone who offers to "save" your home for an up-front fee. The warning letter itself tells you that a foreclosure consultant may not charge one up front (C.R.S. 38-38-102.5).