Colorado’s Expedited Foreclosure Process Deanne R. Stodden Castle Meinhold & Stawiarski, LLC November 4, 2010 Colorado’s Overview of Colorado s Expedited Foreclosure Law On April 29, 2010, Governor Ritter signed the Expedited Foreclosure Bill (aka HB 10-1249) into law. The text can be found at C.R.S. Section 38-38- 906. 901 – 906 The law allows for an expedited foreclosure on t d b d d ti h vacant and abandoned properties or when a grantor consents to an expedited process. Colorado’s Overview of Colorado s Expedited Foreclosure Process Holders of an eligible evidence of debt (“Holders”) can opt to use the expedited process and must do so at the foreclosure. initiation of the foreclosure The expedited process will cut the time for processing a foreclosure in half. The expedited process is not applicable to judicial foreclosures. The dit d b tili d for foreclosures Th expedited process can be utilized f f l filed after August 1, 2010 until August 1, 2013. Colorado s Colorado’s Expedited Foreclosure Process A Holder must notify the Public Trustee (PT) by submitting either an additional notice to the PT when filing the foreclosure that the Holder is electing to use the expedited process or an order authorizing an expedited sale. g p The expedited process can only be utilized for foreclosures on residential properties. Colorado s Colorado’s Expedited Foreclosure Process A Holder cannot switch from non-expedited to expedited or vice-versa during the foreclosure. The foreclosure will have to be withdrawn and re-filed if a Holder wants to proceed the other way. Colorado s Colorado’s Expedited Foreclosure Process If the expedited document or order is received, the PT will set the sale date between 45-65 days from the recording of the NED. If an order authorizing the expedited sale was not provided at the initiation of the foreclosure, the Holder must provide the PT with an order for expedited sale no later than 30 days after the recording of the NED. To obtain the order for expedited sale, the Holder will file ti for dit d l t to Rule 120.1 a motion f expedited sale pursuant t R l 120 1 or other rule of civil procedure. Colorado s Colorado’s Expedited Foreclosure Process - Notices Once the PT sets an expedited sale, the PT will mail one notice to all parties on the mailing list provided by the Holder no more than 25 calendar days after the recording of the NED. The Holder can provide an amended mailing list no later than 30 calendar days after the recording of the NEDNED. If an amended mailing list is provided, the PT shall mail notices to all parties on the amended mailing list no later than five business d th fi b i days f the i t f the from th receipt of th amendedd d mailing list. Colorado s Colorado’s Expedited Foreclosure Process – Notices and Publications If the notice is sent less than 21 calendar days prior to the sale date, the PT shall continue the sale for one week (not to exceed 3 weeks). The PT shall run 4 weeks of consecutive bli ti f the ti f l publications of th notice of sale. The sale may not be continued for more than four weeks. f k Colorado s Colorado’s Expedited Foreclosure Process - Withdrawal The foreclosure shall be deemed withdrawn if the Holder: Fails to timely file a copy of the order for expedited sale; Fails to timely file a mailing list; Delivers an amended mailing list after the deadline Colorado s Colorado’s Expedited Foreclosure Process – Court Order The motion for expedited sale must state that: g The Holder is an eligible Holder; The Deed of Trust secures an eligible evidence of debt; The property has been abandoned or, , g In the alternative, the grantor of the Deed of Trust (borrower) REQUESTS the order for expedited sale; Colorado s Colorado’s Expedited Foreclosure Process – Court Order The clerk of the court shall set a time for a hearing not less than twenty nor more than 30 days from the date of motion. the filing of the motion At least 15 calendar days prior to the hearing, notice of g the hearing IN ENGLISH AND IN SPANISH shall be personally served on the grantor of the Deed of Trust or shall be posted in a “conspicuous place on the property.” N ti shall also b mailed as required b l . Notice h ll l be il d i d by law Colorado s Colorado’s Expedited Foreclosure Process – Court Order The Court shall enter an order for expedited sale if: “Clear and convincing evidence” is presented proving the allegations in the motion and No appearance is made to oppose the motion. Colorado s Colorado’s Expedited Foreclosure Process - Affidavit An affidavit meeting the following requirements shall be prima facie proof of abandonment: Affid it must be signed b and b Affidavit tb i d d by d based upon th the personal knowledge of either: The eligible Holder An agent of the eligible Holder The Sheriff of the county where the property is located A building inspector or other municipal or county official having jurisdiction over the property Colorado s Colorado’s Expedited Foreclosure Process - Affidavit The affidavit must state that the property is not actually occupied and that the signer has inspected the property on more than one occasion and on each occasion has determined abandoned. that the property is abandoned Colorado s Colorado’s Expedited Foreclosure Process - Affidavit The affidavit shall set forth AT LEAST TWO of the following supportive facts: Wi d t to th t b d d Windows or entrances t the property are boarded up or closed off, or multiple panes are broken and p unrepaired; Doors to the property are smashed through, broken off, unhinged, or continuously unlocked; G l ti t i to the t have Gas, electric, AND water service t th property h been terminated for a period of at least 30 days; Colorado s Colorado’s Expedited Foreclosure Process - Affidavit The affidavit shall set forth AT LEAST TWO of the following supportive facts (continued): Th Police or Sheriff’s office has received at least two The P li Sh iff’ ffi h i d tl tt reports of trespassers on the property, or of g g vandalism or other illegal acts being committed on the property; or The property is deteriorating and is either below or is in imminent danger of falling below minimum local government standards for public safety and sanitation. Colorado s Colorado’s Expedited Foreclosure Process - Affidavit Photographic or other documentary evidence that demonstrates the supporting facts set forth in the affidavit shall be attached to the affidavit. A signed affidavit by the grantor of the Deed of T t (borrower) requesting an order f Trust (b ) ti d for expedited sale is prima facie evidence of the same. same Colorado s Colorado’s Expedited Foreclosure Process - Drawbacks The requirement that two forms of proof of abandonment be provided is a difficult standard to meet. F th the requirement that the election to proceed on Further, th i t th t th l ti t d the expedited track must be made at the initiation of the foreclosure will make it difficult for holders to take advantage. The inability to switch from expedited to non-expedited foreclosure status is a significant detractor from using the expedited process. Colorado s Colorado’s Expedited Foreclosure Process - Benefits Benefits lenders, servicers and investors by reducing the foreclosure time. Benefits HOAs by reducing the number of unpaid HOA B fit HOA b d i th b f id dues and reducing the time a vacant property sits as an y “eyesore” to the community. y Benefits code enforcement or other local government officials by reducing the blight, reducing the time in which property, illegal activities may occur in the property reducing the time that the local government has to monitor and/or maintain the property. Benefits neighborhoods by decreasing vacancy time.