Claiming your overbid from the public trustee
Finding and claiming surplus money · 1 study hours
Bottom line: The public trustee holds the leftover overbid for six months from the sale date and must pay it, without interest, to a person legally entitled; contact the office early and do not pay a fee to claim it.
Bottom line first. If a public trustee ran your sale, the overbid sits in the trustee's escrow for six months counted from the sale date. During that time the trustee must pay it to any person legally entitled to it, and it pays no interest. Contact the trustee's office early, keep your address current, and never pay anyone a fee to do what you can ask for yourself.
Check whether money is waiting for you, for free, before you sign anything. This lesson walks through the timeline and what to bring when you ask.
The clock, step by step
Everything runs from the date of the sale. Here is the timeline the statute sets (C.R.S. 38-38-111):
| When | What happens |
|---|---|
| Sale day | The overbid goes first to any deficiency. The rest goes into the public trustee's escrow. |
| While redemption periods run | Lienors who qualify may redeem. The trustee keeps the money. |
| After the last redemption period ends | The trustee pays qualified lienors, then the borrower gets the remainder. |
| Within 30 days after the last redemption period ends | The trustee mails the borrower a notice about the remaining overbid, to the best address available. |
| 60 calendar days after the last redemption period ends | If more than $500 is still unclaimed, the trustee must start a newspaper notice within 90 calendar days after the periods end. |
| Six months from the sale date | The trustee's duty to hold the money without interest ends. Unclaimed money then moves on (see fs-04). |
Notice that the six months are counted from the sale date, not from the day you found out. If the redemption periods take several weeks, the time left to claim is shorter than it looks.
When can the money be paid to you?
The statute pays the borrower only after the redemption periods have expired and the qualified lienors have been paid (C.R.S. 38-38-111(2)). So asking on the day after the sale will usually get you a "not yet." Ask anyway, so the office has your current address and phone on file, and ask when the last redemption period ends.
The trustee has to look for you. If the remaining overbid is $25 or more, the trustee must make reasonable efforts to find your current address and mail you a notice (C.R.S. 38-38-111(2.5)(b)). Do not count on that. Mail goes to the old house.
What to send, and what the law does not say
The statute does not list forms, documents or a fee for a borrower's claim. The statute says the trustee is "answerable for the funds" to "any person legally entitled" to them (C.R.S. 38-38-111(3)(a)(II)). Each office decides how it checks that, so call or look at the office's website first and ask what it accepts. Expect to be asked to show two things: who you are, and that you were the borrower.
- Who you are: expect to be asked for a photo ID. Ask what the office accepts.
- That you were the borrower: the best proof is the sale paperwork with your name: the foreclosure notice, the recorded deed of trust, or the certificate of purchase, which lists the original grantors (C.R.S. 38-38-401(1)(a)).
- The sale details: the property address, the sale number, and the sale date.
- If the owner has died: the person who is legally entitled may be an estate or heirs. Ask the office what paper shows that you can act for the estate. Our inherited-house course at /courses/inherited-house/ explains who inherits and who can act for an estate.
- If two people were borrowers: the statute pays "the borrower." Ask the office how it handles two names. We did not find a rule on this in the sections we read.
Make copies of everything you send. Ask the office to confirm in writing the amount, and to tell you how and when it will pay.
Sheriff sales are different
If the sale was run by a sheriff in a court foreclosure, the statute says all the sale proceeds must be deposited into the registry of the court (C.R.S. 38-38-111(3)(a)(I)). That money is held in the court case, not by a public trustee. Contact the clerk of the court where the foreclosure case was filed, using the case number.
Fee deals for trustee money are not enforceable
Some companies mail letters offering to "recover" your surplus for a share. For money held by the public trustee, the law says an agreement to pay compensation to recover or help recover that money is not enforceable, and a person who induces or tries to induce someone to sign one commits a class 2 misdemeanor (C.R.S. 38-38-111(2.5)(c)). You should not need to pay anyone to claim from the trustee. Lesson fs-05 covers what the law allows later, after money has gone to the state.
Example with real numbers
The numbers are made up. Jordan's house sold. The holder's bid was $200,000, and an outside buyer won at $260,000. Overbid: $260,000 - $200,000 = $60,000.
- Two junior lienors were qualified, and they are owed $26,000 and $15,500, for $41,500 together.
- After the last redemption period ends, they are paid. The remaining overbid is $60,000 - $41,500 = $18,500.
- Within 30 days after the redemption periods end, the trustee mails Jordan a notice. Jordan moved after the foreclosure, so it goes to an old address and is not seen.
- In month three after the sale, Jordan hears about the foreclosure surplus, calls the public trustee, gives the sale number and a new mailing address, and is told the remaining overbid is $18,500.
- Jordan sends a copy of a photo ID and a copy of the certificate of purchase showing Jordan's name, as the office asked, and is paid $18,500. The money earned no interest, so it is the same $18,500.
If Jordan had waited: $18,500 is more than $500, so the trustee would run a newspaper notice, and the cost of the notice and mailing would come out of the escrowed money (C.R.S. 38-38-111(3)(b), (c)). If the money were still unclaimed six months from the sale date, the trustee would have to transfer it to the state (lesson fs-04).
Your short checklist
- Find the sale number and sale date.
- Call the public trustee. Ask the amount held, when the last redemption period ends, and what to send.
- Give a mailing address you will keep for a year.
- Send copies, not originals, and keep your own set.
- Do not sign any fee agreement for trustee money.
General education, not legal advice. Offices differ; ask the trustee for its current process.
Law cited
- C.R.S. 38-38-111
- C.R.S. 38-38-401
Key terms
- Public trustee
- The officer who runs a deed-of-trust foreclosure sale and holds the sale money in escrow.
- Remaining overbid
- What is left of the overbid after the deficiency and the qualified lienors are paid.
- Escrow
- Money held safe by a neutral party until it can be paid to the right person.
- Legally entitled
- Having a legal right to the money, such as the borrower or the borrower's estate.
- Redemption period
- The short window after the sale when certain lienholders may pay to take over the sale.
- Sale number
- The number the public trustee gives a foreclosure sale; use it to identify your file.
- Certificate of purchase
- The recorded paper showing the buyer, the price, and the names of the original borrowers.
- Borrower
- A person or business liable on the loan or deed of trust that was foreclosed.
- Registry of the court
- The account the court clerk uses to hold money in a court case; sheriff sale proceeds are deposited there.
- Class 2 misdemeanor
- A criminal offense in Colorado; the statute uses it for people who push fee deals that the law bars.
- Estate
- All the property a person owned at death.
Flashcards
How long does the public trustee hold an unclaimed overbid before it moves on?
Six months from the date of the sale.
Does the trustee pay interest on escrowed overbid money?
No. It is answerable for the funds without interest.
To whom must the trustee pay the money within the six months?
Any person legally entitled to the funds.
When can the borrower's share actually be paid?
After all redemption periods have expired and the qualified lienors are paid.
When must the trustee mail the borrower a notice?
No later than 30 days after all redemption periods expire.
What overbid amount triggers extra effort to find your address?
$25 or more.
What overbid amount triggers a newspaper notice?
More than $500 unclaimed 60 calendar days after the redemption periods expire.
Who pays for the newspaper and mailing costs?
They are paid from the money the trustee holds in escrow.
Where do sheriff-sale proceeds go?
Into the registry of the court.
Is a fee agreement to recover trustee-held surplus enforceable?
No. Inducing someone to sign one is a class 2 misdemeanor.
Quiz: 10 questions
Tap an answer. It shows right or wrong and opens the reason. Your score is saved in this browser and counts in the study app.
From what date does the six-month holding period run?
- A The day the borrower is told
- B The day the last redemption period ends
- C The day the buyer gets the confirmation deed
- D The date of the sale
Show answer and why
Answer: D. The date of the sale
The statute holds the overbid for six months from the date of the sale, not from a notice date.
C.R.S. 38-38-111(3)(a)(II)
Does the public trustee have to pay interest on an overbid it holds during the six months?
- A Yes, at the loan's default rate
- B No, it is answerable for the funds without interest
- C Yes, but only to lenders
- D Yes, one percent a month
Show answer and why
Answer: B. No, it is answerable for the funds without interest
The trustee is answerable for the funds without interest at any time within the six-month period.
C.R.S. 38-38-111(3)(a)(II)
An overbid is $90,000. Qualified lienors are owed $55,000 together. What is the remaining overbid for the borrower?
- A $55,000
- B $145,000
- C $35,000
- D $0
Show answer and why
Answer: C. $35,000
$90,000 - $55,000 = $35,000 remains for the borrower, if no one else has a claim.
C.R.S. 38-38-111(2)
Which of these is NOT something the statute says about a borrower's claim?
- A It lists the exact ID and forms the borrower must send
- B The trustee must try to find the borrower's address if $25 or more remains
- C The trustee mails a notice within 30 days after redemption periods end
- D The trustee pays any person legally entitled within six months
Show answer and why
Answer: A. It lists the exact ID and forms the borrower must send
The sections read give no list of ID or forms. They set the timing and the duty to notify. Ask the office what it accepts.
C.R.S. 38-38-111(2.5), (3)
Priya's sheriff-run court foreclosure produced sale proceeds. Where does the statute say they go?
- A To the public trustee's escrow
- B To the county general fund
- C To the state treasurer at once
- D Into the registry of the court
Show answer and why
Answer: D. Into the registry of the court
For a sheriff sale, all the sale proceeds must be deposited into the registry of the court.
C.R.S. 38-38-111(3)(a)(I)
A letter offers to recover your trustee-held surplus for 25 percent. What does the statute say about such an agreement?
- A It is enforceable if it is in writing
- B It is not enforceable, and inducing it is a class 2 misdemeanor
- C It is enforceable up to 10 percent
- D It is enforceable after six months
Show answer and why
Answer: B. It is not enforceable, and inducing it is a class 2 misdemeanor
An agreement to pay compensation to recover or assist in recovering an amount due from the public trustee is not enforceable.
C.R.S. 38-38-111(2.5)(c)
When must the trustee start a newspaper notice for unclaimed overbid over $500?
- A Within 90 calendar days after the redemption periods end, if unclaimed 60 days after
- B Within 10 days of the sale
- C Only after the money reaches the state
- D Never, if the borrower moved
Show answer and why
Answer: A. Within 90 calendar days after the redemption periods end, if unclaimed 60 days after
If over $500 is unclaimed 60 calendar days after the periods end, the trustee must start publication within 90 calendar days after they end.
C.R.S. 38-38-111(3)(b)
What is the BEST proof that you were the borrower?
- A A text message from the lender
- B A newspaper article about the neighborhood
- C Sale paperwork showing your name, such as the certificate of purchase
- D A photo of the house
Show answer and why
Answer: C. Sale paperwork showing your name, such as the certificate of purchase
The certificate of purchase lists the original grantors of the deed of trust. Ask the office what else it accepts.
C.R.S. 38-38-401(1)(a)
The remaining overbid is $18,500 and a newspaper notice costs $1,000 for publication and mailing. From where do the costs come?
- A From the borrower's pocket
- B From the money the public trustee holds in escrow
- C From the buyer
- D From the lender
Show answer and why
Answer: B. From the money the public trustee holds in escrow
The statute says the fees and costs of publication and mailing are paid from the money escrowed by the public trustee.
C.R.S. 38-38-111(3)(c)
In Jordan's example, $60,000 overbid minus $41,500 to lienors equals what for Jordan?
- A $41,500
- B $101,500
- C $60,000
- D $18,500
Show answer and why
Answer: D. $18,500
$60,000 - $41,500 = $18,500 remains for the borrower.
C.R.S. 38-38-111(2)
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