The Douglas County Public Trustee Office holds foreclosure sales at a public auction once a week at 402 Wilcox in Castle Rock on Wednesdays at 10:00 a.m. The auction is conducted by the office of the Public Trustee on Deeds of Trust containing a power of sale (right to sell property at public auction in the event of default). The procedures for conducting the auction are set by Colorado State Statutes and the Public Trustee’s office.
There are two main types of foreclosures:
- The Public Trustee Foreclosure
Foreclosures conducted by the office of the Public Trustee.
- The Judicial Foreclosure
A judicial foreclosure is conducted through the court system on a mortgage, deed of trust, or judgment. The Judicial foreclosureis employed when no power of sale clause (Public Trustee) is included in the security instrument. In Colorado, if the Public Trustee is not included in the Deed of Trust, the lender must sue the borrower and obtain a court order to foreclose. Once the court orders a foreclosure, the court orders the Sheriff to conduct the foreclosure sale in accordance with the foreclosure laws.
Colorado Revised Statue 38-38-101 requires certain documents be filed with the Public Trustee in order to initiate a foreclosure. Although the law is very specific concerning what must be submitted and should be carefully reviewed, in general these documents include:
- Cover letter
- Notice of Election and Demand
- Original Evidence of Debt, or a copy of the Note with certificate from the attorney for the Holder of the Evidence of Debt certifying, among other things, the holder is in possession of the evidence of debit, is the current beneficiary and is a qualified holder under the law or a a Corporate Surety Bond in the amount of one and one-half times the face amount of the original Evidence of Debt.
- Original Deed of Trust or certified copy, or copy with certification letter
- List of names and addresses of parties to receive notice
- Any recorded affidavit used to modify the Deed of Trust
- Statement identifying the current owner
- Notice of Foreclosure Deferment Eligibility, if applicable (see C.R.S. 38-38-802)
- A deposit of the Combined Notice to be sent to the persons/entities on the mailing list. However, the Douglas County Public Trustee’s office has chosen to produce this document.
After the Public Trustee receives and accepts the required documents, the Public Trustee files the Notice of Election and Demand with the Clerk and Recorder. The owner now has at least 110 calendar days to cure or reconcile with the bank. For agricultural property the time is at least 215 days. Shortly thereafter, the Public Trustee mails a Combined Notice of Foreclosure stating the schedule sale date which is sent to all persons/entities on the mailing list.
The foreclosing lender must produce a written bid no later than noon two business days before the Public Trustee sale. If a written bid is not received from the lender for a property set for sale, then the sale is postponed for at least one week. Parties interested in bidding must bid in increments of $50.00 over the lender’s bid, which is read aloud at the time of the sale. The bidding is competitive and done orally with the highest bidder winning. Successful bidders must present cash or certified funds payable to “Douglas County Public Trustee” at time of foreclosure sale to cover the amount of their bid. Upon request, the Pubic Trustee may grant permission to a winning bidder to obtain additional certified funds beyond the minimum brought to the sale within two hours from the end of the sale. The Certificate of Purchase is issued to the winning bidder and recorded with the Douglas County Clerk and Recorder. The equity interest under the Certificate of Purchase is fully assignable meaning that the Certificate of Purchase may be sold.
The holder of a junior lien must file an Intent to Redeem with the Office of the Public Trustee within 8 business days after the foreclosure sale and pay the $50 fee. The Public Trustee will then obtain a redemption amount from the bid winner which will be an amount that includes the foreclosure sale amount, per diem interest at the default rate of the note and any other expenses allowed by law. The lienor must present the redemption amount in cash or certified funds to the Public Trustee by the close of business on the final day of lienor’s redemption period. In addition, a lien holder may file intent to redeem only to receive any amounts from the sale in excess of those owed to the foreclosing lender up to the amount of the lien. Lien intents so filed are considered in order of the oldest lien first, etc.
At the time of filing an Intent to Redeem (C.R.S. 38-38-302(1)), the lienor or the lienor’s attorney files a true and correct copy of the recorded instruments evidencing the lien or any assignment with evidence of recording affixed and a statement stating the amount to redeem such lienor’s lien.
Additional information about the foreclosure process can be obtained from the Colorado Revised Statutes, Articles 37, 38, and 39.