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Colorado's Expedited Foreclosure Process

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					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   The foreclosure will have to be withdrawn and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.

				
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