(Ed Note: Welcome Tom Cryer! Tom is our newest Blogger and an expert in foreclosures and short sales at the Kentwood Company. He lists and sells real estate throughout the south Denver suburbs.)
Foreclosures are emotional for people loosing a home. They are business transactions for investors and entrepreneurs who fix and resell them. And, they can be opportunities for folks looking to buy a home. Everyone of these people needs to know how foreclosures work in Colorado.
The Colorado foreclosure time-line was created to walk participants through the transaction process with both a visual and literal interpretation. There are many pitfalls and tight turns in the process. It is not something to be taken lightly, and it can have lasting effects on one’s credit score for years and even eliminate the ability to buy another home for many years.
Foreclosure is a complicated process. There is nothing simple about it, and it can be further complicated by bankruptcy, mortgage modification and short sale procedures that we will talk about later.
In Colorado, the foreclosure process starts after the lender has files a Notice of Election and Demand for proceeds due. The NED is literally delivered to the borrower’s front door, and the foreclosure timeline commences. This process is generally preceded by a period of “missed payments” by the borrower. The borrower’s Note and Deed of Trust would be a good place to investigate the lender’s and borrowers rights.
Subsequent to the lender’s NED filing at the Public Trustee’s office, there is a 110-125 day window for the borrower to redeem the note and begin regular payments once again. This is an opportunity for the borrower to have a second chance.
Additionally, during this window of “foreclosure” proceedings, the public is notified by the public trustee as to the amounts owed to the lender which often include redemption costs and miscellaneous expenses. With the lender’s permission, this note can actually be purchased from the lender or bid for at the time of the Public Trustee’s sale on the “Courthouse Steps”. At the courthouse steps, the property then goes to sale and is open to all qualified bidders. In a rapidly declining market, the only bidder may be the lender. If the public perceives there to be no “upside” to a property, the lender may take title and expose the property to the market as a bank owned or REO property.
Last, but not least, even though the sale has taken place, there may still be residents with substantiated rights living in the property. This would necessitate the eviction process to begin. Like the loan modification and short sale processes, the eviction process will be addressed in future posts. If an individual has won the bid on the courthouse steps for an occupied property, the responsibility of vacating the property from all occupants now falls upon them; once again, a very complicated process.
Finally, liens play a significant roll in obtaining clear title to a property with bidding at the courthouse steps. State, Local and Federal Tax Liens, HOA Liens and mechanics leans can cause havoc on the unsuspecting. Attached is a link to a complete explanation of the Colorado Foreclosure Timeline. If you have any question relating to this process, don’t hesitate to pick up the phone and contact our team of experts ready to assist your family in this time worry and concern.
Interesting post. We are in the Texas market, but the timeline is relatively the same.
In California the lender can file a Notice of Default as early as 30 days past due. However, most will wait for at least 60-90 days past due, then file. That starts a 90 clock, then on day 91 the lender will file a “Notice of Trustee’s Sale.” This goes in the newspaper and starts a 21 day clock. Then its on to the courthouse steps. Sounds like our states are pretty similar. This is great info for homeowners. Many are confused as to what they are facing.
My advice to Denver home owners…don’t wait till you have an NED before taking action. If you know you are going to eventually be leaving the property, just short sell. The incentive to the lender to accept your short sale is much higher if they don’t have to pay all the costs associated with short selling AND…your credit and nerves will thank you.
– Joe
if you are going to loose the house anyway…file bankruptcy… you pay additional income taxes on a 1099 if the mortgage company sells the house….I have audited foreclosed homes…People don’t get out unscathed sometimes in these situations… a man worked for years built his income and retirement…lost his good paying job…used his savings to make the mortgage while trying to work with the mortgage company…got a job making $15 per hour…still trying to get a work out with the mortgage company…spent his all of his retirement savings making payments on the house…still trying to make a workout on the house…finally decided he would short sale the property….then he got a 1099 stating he had make $100k and then had to pay taxes on that as income…He is dead broke, lost everything…then to put salt in the wound he had to pay taxes on an additional $100,000.
I agree with Scott. Interesting post. The timeline is relatively same in texas market. By the way great post. Thanks for sharing with us such a useful information.
My house just sold today 3/30/2111, what is my timeline to get out zip 80013. tx
If the lender won the bid, probably 30 days. You should have an idea in a few days. An eviction notice has to be posted.
So sad that we must keep informing homeowners of the foreclosure process… seems that nation-wide the “timeline” is generally the same. Luckily, up here in Alaska the foreclosure market is of much less volume compared to most of the other states. Short sales can definitely be life savers, I processed short sales and worked with other pre-foreclosure programs in California for a few years, and had very little success with loan modifications. I look forward to reading your other posts on these subjects…
If you purchase a foreclosed property and the previous owner still remains, you will indeed need to file for eviction. I know in Colorado you must give at least 3 days notice (posted) after the date of the execution of the Public Trustee’s Deed. You cannot give eviction notice before then. If they do not move, you will have to either file the case yourself in court or hire an eviction firm to handle it for you. This process can take anywhere from 1-3 weeks, pending a sheriff’s physical move out.
Interesting post you have here. You should learn how Foreclosure timeline works. Everyone should really know how this works. Specially to those people who have a house whose about to loose. Good thing you posted this kind of article. I once lived in Texas and I have a friend who told me that Foreclosure timeline works the same in their place. Useful information. I will share this post to my friends.
I have a client who was letting his house go to foreclosure. It was supposed to be foreclosed last year in August and recently we found out that it will not be foreclosed on until October. I think that the big electronic signature deal has put a kink in the works. The normal procedure is basically the same in Oregon. Although the names are different.
My husband passed away on Dec 25,2011. I am not on the title to the house and he did not have a will. My realtor has 2 offers on a short sale on the house. I have stopped payments on the house as of Jan 2012. The bank has been sending offers aggresively on help on starting to make payments again. Again, they don’t even know that he died. So what do I do now? I am his sole heir, but with no one to sign, we can’t do a short sale,Right? So the property will just have to go to foreclosure?
Your State has a Foreclosure Hot Line. Check with the Dept. of Regulatory Agencies in your state. Fine the Real Estate Commission. From there, you will be able to find the help line. Do this today! Don’t wait.
Also, you will need your Realtor to identify a title company for assistance with your title problems. But, don’t wait, call and make appointments today.
Organize all your paperwork in the meantime. Death Certificate, etc. Now is the time for you to reach out. There are plenty of resources out there ready to help.
Not to hijack this thread, but I want to know if I’m eligible for a short sale and I don’t know how to find a local, highly regarded realtor… do you have any info on this realtor? They’re located in sacramento, 15 minutes from me and I can’t find reviews on them – Becky Lund & Associates – Sacramento Realtors, 8814 Madison Avenue #2 Fair Oaks, CA 95628 (916) 531-7124
Very helpful.