Office of Sen.

Mike Johnston
Colorado General Assembly | 200 E. Colfax Avenue | Denver, CO 80203 | 303.866.4864

Fact Sheet Memorandum

S.B. 12-030 Public Trustee and Foreclosure Sales Sen. Jahn Staff Name: Riki Parikh What the Bill Does: SB 12-030 modifies and clarifies Title 38 of the Colorado Revised Statutes, which relates to the administrative procedures for foreclosure actions. Many of the changes were requested by the Public Trustees Association of Colorado (PTAC) to clarify the language of the statutes and the foreclosure process. Bill Provisions: Section 1 requires that electronic payments to a public trustees account be in compliance with the conditions placed on that account. Section 2 inserts a requirement for holders of a loan (the entity instituting foreclosure proceedings) to file a statement identifying the loan servicer (the entity collecting payments from the borrower) when the foreclosure commences. Section 3 requires a public trustee to include in a Combined Notice the following statement in bold typeface: If a sale is continued, the deadline to file a notice of intent to cure by those parties entitled to cure may also be extended. This statement is intended to inform borrowers of their cure of default rights. Section 4 provides a form template for the Cure Statement, which is provided to the public trustee by the lender of the borrowers attorney when the borrower files an notice of intent to cure. The Cure Statement is a statement of all sums necessary to cure the default that caused the foreclosure. This template language includes a notice to borrowers that the cure payment may take several days to process. The provision also clarifies that the effective dates and deadlines for the Cure Statement are calculated from the date the statement is received by the public trustee, and inserts a requirement that statements are due to the trustees office by noon on its due date. Section 5 provides that the notice of a Court Rule 120 hearing, which authorizes the sale of a foreclosed property, can be posted on the property OR personally handed to the propertys occupant. Section 6 clarifies that the written bid form submitted by a holder must be received by the PT by the deadline. It also inserts a line on the bid for a confirmation deed fee and a confirmation recording fee. Both are fees collected by the officer and would be paid to the officer of the auction sale from the proceeds of the foreclosure sale.

DRAFT 12/13/2011 10:03 AM

For a complete list of fact sheets, visit www.mikejohnston.org/in-thelegislature.

Section 7 modifies foreclosure procedures for a property that is part of a bankruptcy proceeding. It clarifies that the date (as opposed to the time of day) a bankruptcy is filed decides whether the publications of a combined notice have been completed. A bankruptcy filing by a borrower while a foreclosure action is in process stays the foreclosure action. Finally, this provision also places the burden on the foreclosing lenders attorney to notify the PT to restart the foreclosure proceeding if and when the Bankruptcy Court issues an order allowing the foreclosure to resume, and establishes a deadline (within 10 days of the request) within which the PT must re-record the document to restart the foreclosure. Section 8 modifies the definition of excess proceeds from a foreclosure sale (sum of the fees and costs of the sale and moneys due to the holder). It also shortens the deadline (from 90 days to 45 days) for an officer to transfer unclaimed excess proceeds to a county treasurer and clarifies that the county treasurer is accountable for those funds. Section 9 requires that an Assignment of Lien must always be attached to the notice of intent to redeem filed by the person attempting to redeem. Section 10 allows the PT to issue and record a Confirmation Deed no earlier than 10 nor later than 15 business days after the title to the property vests (per statute) if the PT has received the issuance and recording fees for that Deed. Section 11 specifies the procedures for releasing a deed of trust (mortgage) that has been recorded in the wrong county: the deed must be recorded in the correct county before the PT can process a release of that deed. This process will provide the correct chain of title documentation in the country where the property is located. Section 12 states that the act would take effect on September 1, 2012.

Fiscal Impact: There is no fiscal impact associated with this legislation.

DRAFT 12/13/2011 10:03 AM

For a complete list of fact sheets, visit www.mikejohnston.org/in-thelegislature.