Colorado Public Trustees’
Association
HB 1387 – Concerning Real Estate
Foreclosures
Presented June 29, 2006 at the Summer
Conference in Grand Junction, Colorado
HB 1387 History

2003 – The CPTA Legislative Committee
discussed the possibility of reducing or
removing the owner redemption and
increasing the cure period. Chairman
Karen Sheaffer sent a letter to the
Colorado Bar Association Foreclosure
Committee asking for their assistance in
drafting legislation.
HB 1387 History, cont’d.

2004 – The CPTA Legislative Committee
voted to prepare a rough draft to give
to the Bar Committee and again ask for
their assistance. Larry Castle began
working with the draft along with
numerous other changes to the
structure of the foreclosure statutes. It
was decided to wait until the following
year to pursue such a massive bill.
HB 1387 History, cont’d.

2005 – After passage of the
housekeeping bill, HB 2005-1168, work
began in earnest on the foreclosure
rewrite. Larry began the year as the
committee’s drafter and Robert Hopp
later took over the duties. Rep. Michael
Garcia agreed to sponsor the bill and
with the help of Peg Ackerman, Debbie
Wagner, and Michael Valdez, set up a
series of “stakeholder” meetings.
HB 1387 History, cont’d.

2006 – After numerous negotiations and
rewrites, HB 2006-1387 was introduced
in the House. Several amendments
were attached before moving to the
Senate. Sen. Jennifer Veiga was the
Senate sponsor of the bill and there
were again several amendments. The
bill passed at the end of the session and
was signed into law by Governor Owens.
HB 1387
Effective Dates



The bulk of the bill will go into effect on
July 1, 2007.
Nine sections of the bill will become
effective on July 1, 2006.
New provisions will apply to any
foreclosures where the NED is recorded
on or after the effective date.
Provisions that
take effect
July 1, 2006
HB 1387: Section 2
Provisions effective July 1, 2006

38-37-106. Public Trustee to act as
successor in trust – additional duties.

Adds language that if a deed of trust omits
the name of the county, the public trustee
in the county where the property, or any
portion, is located shall act as a successor
public trustee, or as if the public trustee
and county were named in the deed of
trust.
HB 1387: Section 3
Provisions effective July 1, 2006

38-37-108. Payments to public trustee.

Clarifies that payments must be drawn on
banks, savings and loan associations or
credit unions.
HB 1387: Section 11
Provisions effective July 1, 2006

38-38-105. Court order authorizing sale
mandatory.


Requires that a copy of the order
authorizing sale be filed with the public
trustee no later than noon, the 2nd
business day before the sale.
If no response was filed pursuant to the
court hearing, the order only needs to
recite the date the hearing was scheduled.
HB 1387: Section 18
Provisions effective July 1, 2006

38-38-112. Use of electronic
documents authorized – repeal.


Requires the public trustee or sheriff to
establish and uniformly apply policies
concerning whether and to what extent
they will accept documents or records
electronically.
The repeal section changes public trustee
or sheriff to “officer” pursuant to new
definitions that will become effective July
1, 2007.
HB 1387: Section 26
Provisions effective July 1, 2006

38-38-403. Certificates assignable.


Establishes that all certificates of
redemption are also assignable.
If a separate assignment is used, it must
contain at least the information required in
the certificate and the name and address
of the assignor and the assignee.
HB 1387: Section 33
Provisions effective July 1, 2006

38-38-704. Providing information to
homeowner and public – repeal.


Gives the public trustee the authority to
distribute information or materials concerning
foreclosures to homeowners and the general
public. The information and material must be
approved by the Attorney General’s office, an
agency of the State or Federal government or an
attorney retained the by a public trustee.
The repeal section changes public trustee to
“officer” pursuant to new definitions that will
become effective July 1, 2007.
HB 1387: Section 34
Provisions effective July 1, 2006

39-20-103. When holder of prior lien
may file action.

This establishes that the State of Colorado
is to be treated as any other junior lienor if
their tax lien is junior to the deed trust
being foreclosed.
HB 1387: Section 35
Provisions effective July 1, 2006

13-40-111. Issuance and return of
summons.

This helps to streamline the process for a
court foreclosure.
HB 1387: Section 39
Provisions effective July 1, 2006
38-38-102.5. Notice prior to
residential foreclosure.


This entire section is repealed.
HB 1387: Section 4

38-37-113. Checking account –
custodial funds.


This section did not take effect due to
passage of HB 1287: Concerning the
investment of public funds.
HB 1287 allows public trustee to utilize
overnight depository accounts, local
government investment pool trust funds
and eligible money market mutual funds.
Becomes effective August 9, 2006.
Provisions that
take effect
July 1, 2007
HB 1387: Section 1
Provisions effective July 1, 2007

38-37-104. Duties of public trustees –
fees, expenses, and salaries – reports.



The cure fee is replaced with a withdrawal
fee of $35.00.
There is a new “Administrative” withdrawal
fee of $50.00.
There is a new $100.00 for “restarting” a
foreclosure after a partial release is
executed.
HB 1387: Section 1 (cont’d)
Provisions effective July 1, 2007

38-37-104. Duties of public trustees –
fees, expenses, and salaries – reports.


Clarifies that all amounts paid to 3rd parties
in connection with a foreclosure are
considered fees.
Changes “clerk hire” to “staff wages and
any benefits provided pursuant to county
personnel policy” in the reporting section.
HB 1387: Section 5
Provisions effective July 1, 2007

38-37-113. Checking account –
custodial funds.

Adds the following accounts to the
allowable list for public trustees:



ACH, Escrow, & Custodial Accounts
Savings and Loan Associations
Amended from 2006 provision #4 of HB
1287, concerning investments.
HB 1387: Section 6
Provisions effective July 1, 2007

38-38-100.3. Definitions.


Most terms associated with foreclosures
are defined in this section.
The definitions of “agricultural property”
and “qualified holder” are now included in
this section.
HB 1387: Section 7
Provisions effective July 1, 2007

38-38-101. Holder of evidence of debt
may elect to foreclose.



Only one notice of election and demand
needs to be filed.
A copy of the deed of trust and/or the
assignment or indorsement may be filed
with a certification from the holder or a
statement from the attorney.
A combined notice of sale and rights to
cure and redeem must be filed.
HB 1387: Section 7 (cont’d)
Provisions effective July 1, 2007

38-38-101. Holder of evidence of debt
may elect to foreclose.



A supplemental mailing list must be
submitted no less that 60 calendar days
prior to the 1st scheduled sale date.
Redefines what must be included in the
notice of election and demand.
If there are multiple evidences of debt, the
holder may elect to foreclose on just some
of them if properly identified in all docs.
HB 1387: Section 7 (cont’d)
Provisions effective July 1, 2007

38-38-101. Holder of evidence of debt
may elect to foreclose.



Establishes procedures for assignment or
transfer of debt during a foreclosure.
Establishes procedures when a partial
release is executed on a deed of trust in
foreclosure.
Expands the electronic transmission of
funds to include payments back to the
holder or their attorney.
HB 1387: Section 8
Provisions effective July 1, 2007

38-38-102. Recording notice of election
and demand – record of sale.



Allows the public trustee to retain
electronic copies in their records.
Removes the requirement for a record
book.
Records must be available in the public
trustee’s offices during their normal
business hours.
HB 1387: Section 9
Provisions effective July 1, 2007

38-38-103. Combined notice –
publication – providing information.


A combined notice must be mailed no more
than 20 calendar days after recording the
NED to the parties in the initial mailing list.
A 2nd combined notice must be mailed no
more than 60 calendar days nor less than
45 calendar days before the 1st scheduled
sale to the parties in the supplemental
mailing list (includes those in initial list).
HB 1387: Section 9 (cont’d)
Provisions effective July 1, 2007

38-38-103. Combined notice –
publication – providing information.

An amended mailing list may be submitted
at any time but no less than 65 calendar
days prior to the date of sale and the
officer must send the combined notice no
less than 60 calendar days prior to the
sale.
HB 1387: Section 9 (cont’d)
Provisions effective July 1, 2007

38-38-103. Combined notice –
publication – providing information.


If the amended mailing list is submitted
after the 1st publication, the officer shall
continue the sale, mail an amended
combined notice, and republish.
Defines what information must be included
in the combined notice.
HB 1387: Section 9 (cont’d)
Provisions effective July 1, 2007

38-38-103. Combined notice –
publication – providing information.


Publication of the combined notice must be
commenced no more than 60 calendar
days nor less than 45 calendar days prior
to the 1st scheduled sale date. The
published notices will not include the
copies of the statutes.
The officer shall review all publications of
the combined notice for accuracy.
HB 1387: Section 10
Provisions effective July 1, 2007

38-38-104. Right to cure when default
is nonpayment – right to cure for
certain technical defaults.



Lists those who are eligible to cure.
Request for cure statement must be sent
to the holder or their attorney no less than
12 calendar days prior to the sale.
Cure statement must have at least as much
detail as required for a bid.
HB 1387: Section 10 (cont’d)
Provisions effective July 1, 2007

38-38-104. Right to cure when default
is nonpayment – right to cure for
certain technical defaults.


Cure payments will not be sent to the
holder or their attorney until a withdrawal
is filed.
Cure statements must be effective for at
least 10 calendar days but not more than
30 calendar days, or until the last day for a
cure, whichever is first. Good faith
estimates are allowed, if so indicated.
HB 1387: Section 12
Provisions effective July 1, 2007

38-38-106. Bid required – form of bid.





Bids must be submitted by noon the 2nd
business day prior to the sale.
Several items were added to the bid form.
Bids must be made public upon receipt by
the officer.
Bids may be posted or provided rather
than read.
Bids may be amended in writing or
electronically by noon the day before the
sale or orally at the sale.
HB 1387: Section 12 (cont’d)
Provisions effective July 1, 2007

38-38-106. Bid required – form of bid.


Bid payments must be received no later
than the date and time of the sale or at
some other time on the date of sale if
designated in writing by the officer.
If highest bidder fails to pay, the next
highest bidder who has tendered full
payment shall be deemed the successful
bidder at the sale.
HB 1387: Section 13
Provisions effective July 1, 2007

38-38-107. Fees and costs – definitions.


The officer may decline to issue a
confirmation deed until all sums are paid.
Requires disclosure by the holder of any
payment, benefit, or remuneration for
services or products provided in connection
with a foreclosure.
HB 1387: Section 14
Provisions effective July 1, 2007

38-38-108. Date of sale.


Public trustee sales
 Non-Ag: 110-125 days after NED
 Agricultural: 215-230 days after NED
Sheriff sales
 Non-Ag: No less than 110 days after
recording lis pendens
 Agricultural: No less than 215 days after
recording lis pendens
HB 1387: Section 14 (cont’d)
Provisions effective July 1, 2007

38-38-108. Date of sale.


Determination of whether a property is
agricultural or not must be made no less
than 10 calendar days nor more than 20
calendar days after recording the NED.
Statements, rather than certificates, are
required from city clerks or assessors and
do not need to be recorded.
HB 1387: Section 15
Provisions effective July 1, 2007

38-38-109. Continuance of sale – effect
of bankruptcy – withdrawal of sale.



If a sale is not officially held or continued,
it shall be deemed to be continued weekto-week.
Sales may be continued no more than 9
months, rather than 6 months
Sales may be continued to allow for filing
of amended mailing lists.
HB 1387: Section 15 (cont’d)
Provisions effective July 1, 2007

38-38-109. Continuance of sale – effect
of bankruptcy – withdrawal of sale.

If a request from a public trustee for a cure
statement is received 30 calendar days or
less before the sale and it is not filed by
noon the 7th calendar before the sale, the
sale shall be continued week-to-week until
the statement is filed or the 9 months
expire.
HB 1387: Section 15 (cont’d)
Provisions effective July 1, 2007

38-38-109. Continuance of sale – effect
of bankruptcy – withdrawal of sale.

If a request from the public trustee for a
cure statement is received more than 30
calendar days before the sale and it is not
filed within 10 days after receipt, the public
trustee shall assess a fine equivalent to the
original sale fee to be credited to the county
general fund only if the cure is made. If the
statement is not cured by the noon of the 7th
calendar day before the sale, it shall be
continued week-to-week until the statement
is filed or the 9 months expire.
HB 1387: Section 15 (cont’d)
Provisions effective July 1, 2007

38-38-109. Continuance of sale – effect
of bankruptcy – withdrawal of sale.

If a request from a sheriff for a cure
statement is not filed by noon the 7th
calendar before the last day of sale
permitted, the sale shall be deemed
dismissed and unless good cause can be
shown, the holder or their attorney shall file
a motion to dismiss with the court.
HB 1387: Section 15 (cont’d)
Provisions effective July 1, 2007

38-38-109. Continuance of sale – effect
of bankruptcy – withdrawal of sale.

If bankruptcy is filed after all publications
are complete, the officer shall announce,
post, or provide notice of that fact on the
sale date. The sale will then be
automatically continued from week-to-week
unless requested to do otherwise.
HB 1387: Section 15 (cont’d)
Provisions effective July 1, 2007

38-38-109. Continuance of sale – effect
of bankruptcy – withdrawal of sale.

If bankruptcy is filed before all publications
are complete, the officer shall cancel all
remaining publications and on the sale date
announce, post, or provide notice that the
sale has been enjoined or stayed. The sale
shall not be continued.
HB 1387: Section 15 (cont’d)
Provisions effective July 1, 2007

38-38-109. Continuance of sale – effect
of bankruptcy – withdrawal of sale.

Upon termination of the injunction or the
bankruptcy, the public trustee shall rerecord
the NED and restart the foreclosure.
(This is now in a separate section and may
inadvertently refer to both cases where the
publications were completed and where they
were not.)
HB 1387: Section 15 (cont’d)
Provisions effective July 1, 2007

38-38-109. Continuance of sale – effect
of bankruptcy – withdrawal of sale.

If a sale was held in violation of an
automatic bankruptcy stay, the holder or
their attorney shall notify the officer within
within 60 days of the bankruptcy being over
and the officer shall set a new sale date 24
to 49 calendar days after that notification.
Republication shall be within 20 days but at
least 10 days prior to the new sale date.
HB 1387: Section 15 (cont’d)
Provisions effective July 1, 2007

38-38-109. Continuance of sale – effect
of bankruptcy – withdrawal of sale.

If a withdrawal is not filed within 45 days
after the possible sale date, the public
trustee may send notice to the holder or
their attorney. If no response within 30
days, the public trustee may record an
“adminstrative” withdrawal. All fees and
costs are due from the holder and shall
accrue interest. The public trustee may
withhold services until paid.
HB 1387: Section 15 (cont’d)
Provisions effective July 1, 2007

38-38-109. Continuance of sale – effect
of bankruptcy – withdrawal of sale.

If an “administrative” withdrawal is recorded
while the property is under a bankruptcy
automatic stay, the withdrawal is void. The
public trustee shall record a notice of that
fact and mail a copy of the notice to all
persons on the mailing list.
HB 1387: Section 16
Provisions effective July 1, 2007

38-38-110. Sales by officer – location –
announcement - records.



Removes the requirement to read, post or
provide notice of “the date on which the
notice was issued”.
If the street address is available, the legal
description is not necessary.
Removes the requirement for a foreclosure
record book. Data may be entered in the
records of the public trustee.
HB 1387: Section 17
Provisions effective July 1, 2007

38-38-111. Treatment of excess funds.




Excess bid proceeds are first paid to the
holder to the extent of any deficiency.
They are then paid to junior lienors whose
liens were recorded prior to the NED, who
filed a notice of intent to redeem, and
whose liens have not been redeemed.
Lastly, they are paid to the owner as of the
recording of the NED.
Unclaimed funds are transferred to the
treasurer within 90 days.
HB 1387: Section 19
Provisions effective July 1, 2007

38-38-201. Foreclosure of installments
without acceleration.

Some terminology and citations were
changed.
HB 1387: Section 20
Provisions effective July 1, 2007

38-38-301. Holder of certificate of
purchase paying charges – redemption.

Allows holders of certificates of purchase
and redemption to include the same fees
and costs that are allowed for the initial
bid, as described in 38-38-107.
HB 1387: Section 21
Provisions effective July 1, 2007

38-38-302. Redemption by lienor procedure.




There is no owner redemption period.
Liens of junior lienors must have been
recorded prior the recording of the NED.
Intents to redeem must be filed within 10
business days after the sale (except in
certain defined situations).
Statements of amounts due on liens must
include per diem interest.
HB 1387: Section 21 (cont’d)
Provisions effective July 1, 2007

38-38-302. Redemption by lienor procedure.



Redemption statements are due no later
than 14 business days following the sale.
Amended statements must be submitted
no later than 2 business days prior to the
start of each redemption period.
If not filed within 15 business days, the
officer may calculate the redemption
amount.
HB 1387: Section 21 (cont’d)
Provisions effective July 1, 2007

38-38-302. Redemption by lienor –
procedure.



Each junior lienor has five business days to
redeem, starting 15 business days after the
sale for the first lienor.
Payments must be made on or before noon
on the final day of the redemption period.
Short redemptions are allowable with
written consent of the certificate holder
who is to be paid.
HB 1387: Section 21 (cont’d)
Provisions effective July 1, 2007

38-38-302. Redemption by lienor procedure.


The officer shall set the redemption periods
for each junior lienor on the 11th business
day after the sale and they may not be
shortened or altered.
The officer may accept evidence of
electronic account-to-account transfers or
copies of loan servicing computer screens
along with receipts and invoices.
HB 1387: Section 21 (cont’d)
Provisions effective July 1, 2007

38-38-302. Redemption by lienor procedure.


Any redemption rights granted under
federal law are separate and distinct from
those granted under Colorado law.
The officer is not designated to receive
redemptions under federal law.
HB 1387: Section 22
Provisions effective July 1, 2007

38-38-304. Effect of redemption.


Removes reference to owner redemptions.
Interest acquired through redemption is
now also subject to the rights of omitted
parties.
HB 1387: Section 23
Provisions effective July 1, 2007

38-38-306. Rights of other lienors to
redeem.


The owner may be entitled to refunds from
payments held in escrow after final
judgment on a mechanics lien.
The owner’s rights to excess sale proceeds
are subordinate to any beneficiaries of
Deeds of Trust where the owner waived
the Homestead Exemption.
HB 1387: Section 24
Provisions effective July 1, 2007

38-38-401. Certificate of purchase –
issuance.


The only certificate of purchase shall be
recorded no later than 5 business days
after the sale and shall also include any
deficiency as a result of the sale.
The recorded certificate shall be retained in
the officer’s records.
HB 1387: Section 25
Provisions effective July 1, 2007

38-38-402. Certificate of redemption –
issuance.


The only certificate of redemption shall be
recorded no sooner than 15 business days
after the sale but no later than 5 business
days following receipt of the redemption
payment.
The recorded certificate shall be retained in
the officer’s records.
HB 1387: Section 27
Provisions effective July 1, 2007

38-38-405. Certificate as prima facie
evidence.

This section is moved from two other
sections and includes certificate of
purchase, the certificate of redemption,
and the confirmation deed, or a certified
copy thereof.
HB 1387: Section 28
Provisions effective July 1, 2007

38-38-501. Title vests upon expiration
of redemption periods – confirmation
deed.


At the end of all redemption periods or, if
none, upon the close of business 10
business days after the sale, title vests.
No less than 15 business days after the
sale or, if later, the end of all redemption
periods, the officer shall issue and record a
confirmation deed.
HB 1387: Sections 29 & 30
Provisions effective July 1, 2007

38-38-502. Form of confirmation deed
for public trustee’s sale.



Adds the word, “confirmation”.
Changes “notice of sale” to “combined
notice”.
38-38-503. Form of confirmation deed
for sheriff’s sale.

Adds the word, “confirmation”.
HB 1387: Section 31
Provisions effective July 1, 2007

38-38-506. Omitted parties –
definitions.

Clarifies that the omitted parties’ interest
must be of record prior to the recording of
the NED or Lis Pendens, and must be
junior to the lien being foreclosed.
HB 1387: Section 32
Provisions effective July 1, 2007

38-38-702. Limitation of officer liability.


Consolidates all liability sections.
Updates what an officer shall no have
responsibility or liability for determining
 Includes the accuracy of the legal
description on a full release.
 Adds the legal sufficiency of the
description of the property in the NED.
HB 1387: Section 32 (cont’d)
Provisions effective July 1, 2007

38-38-703. No waiver of or agreement
to shorten right to cure.

Clarifies that an agreement to shorten the
time to exercise the right to cure is void
and against public policy.
HB 1387: Section 36
Provisions effective July 1, 2007

38-35-126. Contract for deed – escrow
of tax moneys – written notice.

Minor terminology changes.
HB 1387: Section 37
Provisions effective July 1, 2007

38-37-110. Public trustee forfeits fees
for failure to meet statutory time
requirements – validity of foreclosure
unaffected.

Changes citations and adds “confirmation”
before deed.
HB 1387: Section 38
Provisions effective July 1, 2007

38-38-701. Application – use of term
“foreclosure”.

Adds the provision that if a deed of trust
grants power of sale but contains no
provision on the manner in which the
power of sale is to be exercised, the holder
may foreclose pursuant to the foreclosure
statutes through the public trustee or the
courts.
HB 1387: Section 40
Provisions effective July 1, 2007

38-38-303. Time of redemption by
lienor.


This entire section was repealed.
All the provisions were moved to either
38-38-301 or 38-38-302.
HB 1387: Section 40 (cont’d)
Provisions effective July 1, 2007

38-38-404. Replacement certificate
issued in case of loss of originals.


This entire section was repealed.
There will no longer be an original. One
certificate will be issued, recorded, and
retained by the officer.
HB 1387 – Thank you’s

Legislators



Rep. Michael Garcia
Sen. Jennifer Veiga
Attorneys





Rich Krohn
Larry Castle
Robert Hopp
Bob Holmes
Michael Valdez
HB 1387 – More thank you’s

Ackerman & Associates



Peg Ackerman
Debbie Wagner
Public Trustees





Roxy Huber, Co-Chair
Jack Arrowsmith, Committee Testimony
Legislative Committee
Appointed Public Trustees
Executive Board
HB 1387 – Next Steps

Forms Committee


Manual Committee



New “Combined Notice” of sale and of
rights to cure and redeem
July 1, 2006 provisions
July 1, 2007 provisions
Executive Committee


New Fee Schedule
Training Opportunities