Foreclosure Timeline 101

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Foreclosure properties are a very important subset of distressed properties that are dealt with in real estate investing. Below is a timeline of how the process works. This is a complex statute and an attorney should be consulting before taking any steps or making any decisions regarding the foreclosure process.

A loan is in default as soon as soon as any payment has been due and unpaid for more than 30 days. Below is an outline of the foreclosure process after a loan is in default.

Pre-Foreclosure

  • At least 30 days before filing the notice of election and demand and at least 30 days after default, the lender is required to mail a notice to the borrower with numbers for the Colorado foreclosure hotline and the lender's loss mitigation department.

Commencement of Foreclosure

  • The lender/lender's attorney files with the public trustee of the county where the property is located.
    • Notice of Election and Demand for Sale; Original Evidence of Debt, or lost instrument bond if the evidence of debt is mislaid, unless the lender is able to provide an indemnity as a financial institution; mailing list containing names and addresses of owners, guarantors, lessees, and occupants, who will receive notice of sale; the combined notice that the public trustee mails to the persons in the mailing list; a deposit on the fees of the public trustee

Foreclosure Deferment

  • Owner-occupied primary residence who is personally obligated to the debt and the principal amount is less than $500,000
  • No more than 15 days after the filing of the documents by the attorney, and acceptance by the public trustee, the lender/attorney must personally serve on the borrower, or post in an obvious place on the property (front door or gate) a notice that the property is being foreclosed
  • The lender/attorney must file an affidavit with the public trustee within 20 days after the initial filing stating that the posting has been made
  • No more than 30 days after initial contact, the counselor must decide if the borrower is eligible for deferment

Commencement of Sale - Public Trustee Procedures

  • Record NED (10 business days after receipt)
  • Advertise in local newspaper the scheduled date of sale for 5 consecutive weeks (between 45-60 days prior to scheduled date of sale)
  • Mail copies of combined notice (20 days after NED is recorded)
  • Mail copies of combined notice to parties shown on supplemental mailing list (45-60 days prior to scheduled date of sale)
  • Schedule Sale (not less than 110 and more than 125 days after recording NED

Expedited Sale

  • Applies only to a residential mortgage in first lien position and the deed of trust does not specify a longer publication date. Does not apply to judicial foreclosures.
  • Lender is able to elect to have an expedited sale (40-55 calendar days after NED is recorded)
  • A court must issue an order for expedited sale with a copy being filed with the public trustee

More about the Foreclosure Process to be published in future blogs.

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Brandi Thomas