Foreclosure bargains are rare in Eagle County
Vail, CO, Colorado
EAGLE COUNTY ” With increasing publicity nationwide surrounding the rising foreclosure rate, it is important to know that the public trustee foreclosure process in Colorado is anything but easy, and “good deals” are hard to come by in Eagle County.
Colorado’s foreclosure process is different from most other states. In Colorado, foreclosures are processed in one of two ways. They are either sent to the Eagle County Public Trustee’s Office for processing, or they are processed through the court system. Our public trustee system was established in 1894 to provide checks and balances between borrowers and lenders. It gives the borrower and lender a neutral third party to process foreclosures as well as releases of deeds of trust. Unique among the 50 states, Colorado foreclosure laws have provided a reasonably quick and inexpensive process for a lender to exercise its rights while giving the borrower a fair opportunity to protect his or her interest in the property.
The public trustee foreclosure process in Eagle County follows this time line:
The Public Trustee’s Office receives a foreclosure packet from the foreclosing attorney and must start foreclosure proceedings within 10 business days.
Publications and sale dates are set. The sale date is 45 to 60 days from the time the process begins.
Parties with an interest in the property are notified.
Notice of the public trustee sale must be published in a local newspaper for five consecutive weeks.
The owner of the property being foreclosed (and certain other lien holders) is entitled to “cure” or bring current the default. If a cure is received by the Public Trustee’s Office, the foreclosing attorney is notified, and the foreclosure is withdrawn.
The foreclosing attorney can file a written withdrawal of the foreclosure with the Public Trustee’s Office.
If the debt isn’t made current, the Public Trustee’s Office will receive a bid from the foreclosing attorney on behalf of the lender. This will be the opening bid at the foreclosure sale. The opening bid includes the outstanding principal balance due on the loan, interest and any other fees and costs.
The Eagle County Public Trustee’s Office holds its foreclosure sales every Wednesday at 10 a.m. Bidders must register no later than 9:45 a.m. Investors must be present to place a bid. Bids must be at least $1 over the starting bid announced by the public trustee, and following bids must be in $1,000 increments. Bidders are required to pay the full bid amount at the time of the sale.
The successful bidder at sale will receive an original certificate of purchase which they hold until the owner’s redemption period expires. The Public Trustee’s Office will record with the county clerk and recorder a duplicate certificate of purchase which will be kept on file.
That’s not the end
A property owner then has 75 days to redeem his or her property from the day of the foreclosure sale. Agricultural-property owners have six months to redeem their property.
If the property owner does not redeem, lien holders also have the right to redeem as long as the appropriate paperwork is filed with the Public Trustee’s Office.
Once all redemption periods have expired, title to the property transfers to either the person holding the Certificate of Purchase or the person holding the Certificate of Redemption.
The law is also changing, effective July 1 of this year. The original sale date for non-agricultural property will be 110-125 calendar days after beginning foreclosure proceedings, and the original sale date for agricultural property will be 215-230 days after commencement of foreclosure. There will be no owner’s redemption period, and some lien holders will have to file paperwork with the Public Trustee’s Office to have a redemption period.
Here are some of the most common questions the public trustee’s office receives:
Can I get a pre-foreclosure list from the county?
No. The county does not receive notification that a homeowner is in default until foreclosure forms are filed.
Is the foreclosure a first mortgage?
The Public Trustee’s Office doesn’t know if the foreclosure is on a first mortgage or not. The investor has to research and determine if there are other liens on the property. This is especially important because the investor may become responsible for those liens.
If I’m a winning bidder at a foreclosure sale, when do I have to pay?
You have to come to the foreclosure sale with cash or certified funds and be prepared to pay on the spot.
Can I see the property before I bid?
An investor in Colorado does not have the right to see the property before bidding at a foreclosure sale. The homeowner still owns it.
Will I own the property if I’m the winning bidder at a foreclosure sale?
No. An investor in Colorado doesn’t own the property until all of the redemption periods have expired.
Will I have access to the property if I’m the successful bidder at a foreclosure sale?
Can I make improvements to the property?
No. The investor has to wait until all the redemption periods are over and they take title to the property before anything can be done. The homeowner holds title to the property until the end of the foreclosure process, which means that the investor has no control over what happens to that home during that time period. Under current law, it also means the investor has to wait until the 75 days is over (or more if lien holders want the opportunity to redeem) before they can begin any kind of eviction process.
What happens to my money during the redemption periods?
If the winning bidder at a foreclosure sale is a third party (not the lender), the Public Trustee’s Office will send the lender their bid amount out of the sale proceeds. If there is extra money, it is held by the public trustee until all of the redemption periods are over. At that point, lien holders (if there are any) may be entitled to the extra money and the homeowner may actually be entitled to some of the extra money as well.
If the owner wants to pay off the loan after the foreclosure sale, what interest rate do I get on my money?
If you’re the winning bidder at a foreclosure sale, you will earn interest at the interest rate spelled out in the loan. If there is no default rate (and often there is not), you will earn interest at the loan’s original interest rate.
For more information call the Eagle County Public Trustee’s Office at 328-8870. Public trustee foreclosure listings are available online at http://www.eaglecounty.us/gts/index.aspx.
Karen L. Sheaffer is the Eagle County Public Trustee. Karla Herridge is the Eagle County Deputy Public Trustee.
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