In 2006, the Colorado Legislature passed HB 06-1387, which produced significant changes to Colorado’s foreclosure laws. Although the majority of the changes were to take effect July 1, 2007, the 2007 Legislature passed HB 07-1157, which made additional changes and pushed back the effective date for many of the 2006 modifications to January 1, 2008. This alert summarizes the most significant changes that will affect both lenders and borrowers and provides a revised timeline for the foreclosure process after January 1, 2008.
SUMMARY OF CHANGES
- The owner’s redemption period eliminated, but cure period lengthened. In the past, an owner could cure a default up to the sale date (typically occurring within 45-60 days), then had 75 days (180 days if agricultural land) after the sale to redeem the property from the foreclosure. Under the new amendments, an owner will have the right to cure a default up to the sale date (typically 110- 125 days after filing of the Notice of Election and Demand (“NED”)). Once the sale occurs, however, the owner will not have a right to redeem the property.
- Sale dates. In the past, the public trustee’s sale would usually occur 45-60 days after the recording of the NED. Under the new provisions that extend the owner’s cure period, the sale will typically occur 110-125 days after the recording of the NED (215-230 days for agricultural land).
- Rights to cure or redeem fixed on date of recording of Notice of Election and Demand. Only the owner of the property at the time of the recording of the NED has the right to cure. Similarly, only junior lienors of record at the time the NED is recorded have the right to redeem following the foreclosure sale.
- Transfer of title if there is no redemption. If no junior lienor files a notice of intent to redeem, title passes at the close of business of the 8th business day after the sale.
- No right to cure non-payment defaults. If the Rule 120 Order authorizing the foreclosure sale states that the Court has made a determination that there is a reasonable probability of a nonpayment default, the owner’s right to cure is eliminated.
- “Combined Notice.” In the past, the public trustee sent a separate Notice of Sale and a separate Notice of Right to Redeem. Now, a “combined notice” takes the place of both the Notice of Sale and Notice of Right to Redeem. The “combined notice” must be mailed at least twice before the sale.
CONTACT HRO FOR MORE INFORMATION OR ASSISTANCE
A table summarizing the new timeline for Colorado foreclosures is provided here. HRO attorneys are knowledgeable of, and experienced with, Colorado’s foreclosure laws. Please contact us for more information about Colorado’s foreclosure laws or assistance with a foreclosure matter.