guidelines - worddoc 12-16-19.docx · web viewthis manual is prepared by the public trustees...

COLORADO REVISED STATUTES PERTAINING TO PUBLIC TRUSTEES - EFFECTIVE 12/16/2019

PUBLIC TRUSTEEASSOCIATION OF COLORADORECOMMENDED GUIDELINES

March 6, 2018

Committee:

Betty Diller – Archuleta County (Chair)Robert Sagel – Morgan CountyKarla Bagley – Garfield County

December 16, 2019

Updated with Legislative changesRobert Sagel

Disclaimer: This manual is prepared by the Public Trustees Association of Colorado for use by its members in the conduct of their duties. It summarizes the common understanding of the Colorado Revised Statutes by the public trustees and includes advice received from the association’s attorney. This manual is not legal advice. It is provided in the interest of having the public trustee statutes understood and applied consistently across all 64 Colorado counties. Since this manual applies to current law and public trustees, it omits parts of the statutes that are now obsolete, apply

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only to sheriff sales, or other matters that do not directly affect public trustees. Where text is omitted in context of a sentence, this is shown by “…”

38-37-100.5. Definitions..........................................................................................................................................738-37-101. Creation of the office of public trustee..................................................................................................738-37-102. Appointment - bond - office..................................................................................................................738-37-103. Deputy trustee - successor in office.......................................................................................................838-37-104. Duties of public trustees - fees, expenses, and salaries - reports...........................................................838-37-105. Classification of counties for purposes of regulating fees and salaries of public trustees...................1238-37-106. Public trustee to act as successor in trust - additional duties...............................................................1338-37-107. Fees under successor trusteeship.........................................................................................................1338-37-108. Payments to public trustee...................................................................................................................1338-37-109. Suits against public trustee..................................................................................................................1438-37-110. Public trustee forfeits fees for failure to meet statutory time requirements - validity of foreclosure unaffected...............................................................................................................................................................1438-37-111. Public trustees authorized to cooperate and contract with one another and others.............................1538-37-112. Powers of public trustees when counties are formed or when county boundaries change..................1538-37-113. Checking account - custodial funds.....................................................................................................15

TITLE 38, ARTICLE 38: FORECLOSURE SALES................................................................................................1738-38-100.3. Definitions........................................................................................................................................1738-38-101. Holder of evidence of debt may elect to foreclose..............................................................................2138-38-102. Recording notice of election and demand - record of sale...................................................................2538-38-102.5. Notice prior to residential foreclosure – hotline...............................................................................2638-38-103. Combined notice - publication - providing information......................................................................2638-38-103.1. Single point of contact - servicer to designate - duties - exemption.................................................2938-38-103.2. Dual tracking prohibited - notice to officer - continuation of sale pending inquiry.........................3038-38-104. Right to cure when default is nonpayment - right to cure for certain technical defaults.....................3238-38-105. Court order authorizing sale mandatory - repeal.................................................................................3838-38-106. Bid required - form of bid....................................................................................................................3938-38-107. Fees and costs - definitions..................................................................................................................4238-38-108. Date of sale..........................................................................................................................................4438-38-109. Continuance of sale - effect of bankruptcy - withdrawal of sale.........................................................4438-38-110. Sales by officer - location - announcement - records..........................................................................4938-38-111. Treatment of excess proceeds..............................................................................................................4938-38-112. Use of electronic documents authorized..............................................................................................5238-38-113. Rescission of public trustee sale..........................................................................................................5238-38-114. Unclaimed refunds - disposition under "Unclaimed Property Act".....................................................54

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38-38-201. Foreclosure of installments without acceleration................................................................................5438-38-301. Holder of certificate of purchase paying charges - redemption...........................................................5438-38-302. Redemption by lienor - procedure.......................................................................................................5538-38-304. Effect of redemption............................................................................................................................6238-38-305. Lessee, easement holder, and installment land contract vendor considered as lienors - installment land contract vendee considered as an owner - repeal............................................................................................6238-38-306. Rights of other lienors to redeem.........................................................................................................6238-38-401. Certificate of purchase - issuance........................................................................................................6338-38-401.5. Certificate - priority of lien...............................................................................................................6438-38-402. Certificate of redemption - issuance....................................................................................................6438-38-403. Certificates assignable.........................................................................................................................6438-38-405. Certificate as prima facie evidence......................................................................................................6538-38-501. Title vests upon expiration of redemption periods - confirmation deed..............................................6538-38-502. Form of confirmation deed for public trustee's sale............................................................................6638-38-503. Form of confirmation deed for sheriff's sale........................................................................................6738-38-504. Deed evidence of compliance..............................................................................................................6738-38-505. Effect of foreclosures as to certain classes of persons.........................................................................6738-38-506. Omitted parties - definitions................................................................................................................6738-38-601. Receiver appointed upon application...................................................................................................6838-38-602. Appointment of receiver to prevent waste...........................................................................................6938-38-701. Application - use of term "foreclosure"...............................................................................................6938-38-702. Limitation of officer's liability.............................................................................................................6938-38-703. No waiver of or agreement to shorten right to cure.............................................................................7038-38-704. Providing information to homeowner and public - repeal...................................................................7038-38-705. Curative provisions..............................................................................................................................70

TITLE 38, ARTICLE 39: MORTGAGES, DEEDS OF TRUST, AND OTHER LIENS.........................................7115-12-1201. Collection of personal property by affidavit......................................................................................7138-39-100.5. Definitions........................................................................................................................................7238-39-101. Effect of deed of trust to private trustee - nature of obligation secured..............................................7238-39-102. When deed of trust shall be released....................................................................................................7238-39-103. Effect of release or partial release before maturity of evidence of debt - release is good as to recitals.................................................................................................................................................................................7738-39-104. Satisfaction of mortgage......................................................................................................................7738-39-105. Removal of improvements from encumbered property.......................................................................7738-39-106. Future advances...................................................................................................................................7838-39-107. Form of written request for release of a deed of trust with production of the evidence of debt..........7838-39-108. Form of written request for release of a deed of trust without production of the evidence of debt.....79

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38-39-109. When release of deed of trust is recorded............................................................................................8138-39-201. Liens not to run over fifteen years.......................................................................................................8138-39-202. Lien extended - method.......................................................................................................................8138-39-203. No release necessary............................................................................................................................8238-39-204. Effect of notice of action on lien.........................................................................................................8238-39-205. Action to be brought within fifteen years............................................................................................8238-39-206. Does not extend any lien......................................................................................................................8238-39-207. Lien extinguished when action barred.................................................................................................8238-39-208. Action within seven years when in possession....................................................................................8238-39-209. Mortgages to United States..................................................................................................................82

OTHER RELEVANT PROVISIONS........................................................................................................................8324-70-101. [Legal Publications] Definitions..........................................................................................................8324-70-102. Legal publications................................................................................................................................8324-70-103. Requisites of legal newspaper..............................................................................................................8324-70-105. Proof of publication.............................................................................................................................8424-70-106. Competency of newspapers - publication periods construed...............................................................8424-70-107. Rates for legal publications..................................................................................................................8524-70-108. Designation of legal newspaper...........................................................................................................8529-1-101. Short title [Local Government Budget Law of Colorado].....................................................................8629-1-102. Definitions.............................................................................................................................................8629-1-103. Budgets required....................................................................................................................................8729-1-104. By whom budget prepared.....................................................................................................................8829-1-105. Budget estimates....................................................................................................................................8829-1-106. Notice of budget.....................................................................................................................................8829-1-107. Objections to budget..............................................................................................................................8929-1-108. Adoption of budget - appropriations - failure to adopt..........................................................................8929-1-109. Changes to budget - transfers - supplemental appropriations................................................................8929-1-110. Expenditures not to exceed appropriation.............................................................................................9029-1-111. Contingencies.........................................................................................................................................9029-1-112. Payment for contingencies.....................................................................................................................9029-1-113. Filing of budget......................................................................................................................................9029-1-114. Record of expenditures..........................................................................................................................9129-1-115. Violation is malfeasance – removal.......................................................................................................9138-13-101. Short title [Unclaimed Property Act]...................................................................................................9138-13-102. Definitions and use of terms................................................................................................................9138-13-108.2. Property held by courts and public agencies....................................................................................9238-13-110. Report and payment or delivery of abandoned property.....................................................................92

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38-13-112. Payment or delivery of abandoned property to the administrator........................................................9338-30-171. Survival of remedies and title to corporate property after dissolution.................................................9338-30-173. Survival of remedies and title to corporate property after dissolution - nonprofit corporations.........9338-33.3-316. Lien for assessments.........................................................................................................................9438-34-104. Death of trustee [of an express trust]...................................................................................................9538-35-106. Deeds - acknowledgment, absent or defective - notice - deemed proper, when..................................9538-35-109. Instrument may be recorded - validity of unrecorded instruments - liability for fraudulent documents................................................................................................................................................................................9538-35-126. Contract for deed - escrow of tax moneys - written notice..................................................................9739-10-104.5. Payment dates - optional payment dates - failure to pay – delinquency...........................................99

PROCEDURES........................................................................................................................................................101RECEIPT OF INTENT TO CURE......................................................................................................................101CURE STATEMENT...........................................................................................................................................101CURE PAYMENTS.............................................................................................................................................102IMPLEMENTATION OF HOUSE BILL 16-1339..............................................................................................103RECEIPT OF LIENOR INTENT TO REDEEM.................................................................................................103LIENOR REDEMPTION STATEMENT............................................................................................................104LIENOR REDEMPTION PAYMENTS..............................................................................................................105RELEASING A DEED OF TRUST.....................................................................................................................106BANKRUPTCY FILINGS...................................................................................................................................107INSTALLMENT LAND CONTRACTS.............................................................................................................107STARTING A NEW FORECLOSURE...............................................................................................................108PUBLICATIONS AND MAILINGS...................................................................................................................109PUBLICATIONS.................................................................................................................................................109WITHDRAWING A FORECLOSURE...............................................................................................................110PREPARING FILES FOR SALE........................................................................................................................110ISSUING A CONFIRMATION DEED...............................................................................................................111RESCISSION.......................................................................................................................................................112OVERBID FUNDS..............................................................................................................................................112FORECLOSURE MISC. (Transfer of Debt, Partial Release, Late Amended Mailing List)...............................113

TABLE OF ACRONYMS.......................................................................................................................................114LEGAL OPINIONS.................................................................................................................................................114

REQUIRED ELEMENTS OF OAS.....................................................................................................................114RELEASES SIGNED BY NTC/WELLS FARGO EMPLOYEES AS QUALIFIED HOLDERS......................115

DOCUMENTS.........................................................................................................................................................115OATH OF OFFICE..............................................................................................................................................115APPOINTMENT OF DEPUTY WITH OATH...................................................................................................115

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REVOCATION OF APPOINTMENT AND OATH OF DEPUTY PUBLIC TRUSTEE..................................116CURE STATEMENT...........................................................................................................................................116BID.......................................................................................................................................................................117PUBLIC TRUSTEE POLICIES...........................................................................................................................119PUBLIC TRUSTEE SALE PROCEDURES.......................................................................................................120PUBLIC TRUSTEE REQUEST FOR AGRICULTURAL STATUS INFORMATION....................................121INDORSEMENT OF REINSTATEMENT.........................................................................................................122SAMPLE CONDUCT OF SALE SCRIPT..........................................................................................................122REDEEMING HOA LIENS.................................................................................................................................123NOTICE OF LIENOR INTENT TO REDEEM..................................................................................................123STATEMENT OF REDEMPTION AMOUNT...................................................................................................124REDEMPTION STATEMENT – CERTIFICATE OF PURCHASE HOLDER.................................................124CERTIFICATE OF LIENOR...............................................................................................................................125PUBLIC TRUSTEE'S CERTIFICATE OF PURCHASE....................................................................................126CERTIFICATE OF REDEMPTION....................................................................................................................127CONFIRMATION DEED....................................................................................................................................127AFFIRMATION OF LEASE...............................................................................................................................128

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TITLE 38, ARTICLE 37: OFFICE OF PUBLIC TRUSTEEPUBLIC TRUSTEE

38-37-100.5. Definitions

The definitions in section 38-38-100.3 apply to this article unless the context otherwise requires.

38-37-101. Creation of the office of public trustee.There is hereby created the office of public trustee in each county in this state, whose duties are as prescribed by law. In all counties of the second class, such public trustee shall be appointed as provided in section 38-37-102, and, in counties of all other classes, the county treasurer of the county shall be such public trustee; except that, in the city and county of Denver and the city and county of Broomfield, the public trustee shall be such equivalent officer as shall be provided by its charter or code.

COMMENTS: 1. Each county has an office of public trustee. The county treasurer in counties of the third class, except Broomfield, also is the public trustee of that county. 38-37-102(2), and the references to interactions between the public trustee and treasurer in 38-37-104(3), 38-38-111(3), and 38-35-126(1) make it clear that the offices are different from each other even if the same person holds both titles. 2. Denver or Broomfield may change its charter or code to assign the duties of the public trustee as it sees fit. 3. Although not mentioned here, the Pitkin County Home Rule Charter also deviates from the third class rule, stating “The Department of Finance shall have all of the powers, duties, and functions formerly given to the county treasurer and the public trustee of the county (each as set forth from time to time in applicable statutes).” The charter further states that “All fees to be charged and collected by the treasurer and public trustee shall be as established from time to time by the Board of County Commissioners by formal resolution.” This appears to allow Pitkin County to follow different rules than are set forth in 38-37-104. 4. The charter for the City and County of Denver states “The clerk and recorder shall, without additional compensation, perform all the acts and duties now required or hereafter required by the general laws of this state to be exercised or performed by the public trustee for the City and County of Denver, or may appoint a deputy to perform such acts and duties.”

38-37-102. Appointment - bond - office.(1) (a) Prior to July 1, 2020, the governor shall appoint a public trustee in and for each of the counties of the second class. All appointments of public trustees by the governor in and for counties of the second class shall be for terms of four years; except that the term of a public trustee in and for any county of the second class appointed on or after January 1, 2019, shall be for a term that terminates on June 30, 2020. If the office of public trustee in and for any county of the second class should become vacant prior to July 1, 2020, the governor shall appoint a successor to complete the term. Notwithstanding any other provision of this section, the governor may appoint the treasurer of a county in which a vacancy occurs as a successor to complete the term of a public trustee appointed by the governor. When appointing a person other than a county treasurer, the governor shall appoint only those persons who have at least a four-year college degree and five years' administrative or business experience or, in the alternative, ten years' administrative or business experience. Any person so appointed public trustee shall serve at the pleasure of the governor. Every person other than a county treasurer appointed as public trustee in counties of the second class shall, before entering upon the duties of such office, execute a surety bond issued by a company authorized to issue such bonds in the state of Colorado, in the sum of twenty-five thousand dollars, conditioned that the person so appointed as public trustee will well and faithfully execute the duties of such office; and such public trustee shall promptly account for and pay over to such persons as are entitled thereto all money and other valuables that come into such person's hands as public trustee.(b) In November of 2021, each county of the second class shall provide a copy of the most recent report prepared pursuant to section 38-37-104 (3) to the Department of Local Affairs. The Department of Local Affairs shall compile the reports of the counties and present them to the House Transportation and Local Government Committee and the Senate Local Government Committee, or their successor committees, by January 1, 2022.

COMMENTS: THIS SECTION WAS AMENDED IN THE 2019 LEGISLATIVE SESSION(2) (a) Prior to July 1, 2020, the county treasurer shall be the public trustee in each of the counties of the third class. On and after July 1, 2020, the county treasurer shall be the public trustee in each of the counties of the second and third class. Prior to commencing service as a public trustee in July 2020, each treasurer in a county of the second class shall create a written transition plan for assuming the new duties of the office. The transition plan must describe the anticipated staffing needs and budget impacts on the office and specify how the office will address those needs and impacts. In creating the transition plan, the treasurer may consider any pertinent studies or reports on the conduct of the public trustee’s office in order to better understand the scope and detail of the work. In creating the transition plan, the

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treasurer may also consult with the current public trustee and the public trustee’s staff on issues related to the trustee’s functions and how to best transition the powers and duties of the trustee to the treasurer’s office. The treasurer shall post the transition plan on the county’s website not less than sixty days prior to assuming the duties of the public trustee. Upon commencing service as a public trustee in July 2020, each treasurer of a county of the second class shall consider any staffing needs associated with assuming the duties of public trustee and may consider hiring existing staff from the previous appointed public trustee’s office, including the prior public trustee, to the extent it is practicable and the treasurer finds it necessary to augment staff in the treasurer’s office to meet the obligations of serving as public trustee. The county treasurer of a county of the second class shall confer with the board of county commissioners as part of the annual budget development process by the county on any additional staffing needs that are required to accommodate any additional public trustee functions performed by the office of the treasurer.(b) In counties wherein the county treasurer is the public trustee, as provided in this subsection (2), such person shall conduct the duties of public trustee at the office of the county treasurer; and, in counties wherein the county treasurer is not the public trustee, the public trustee shall maintain an office and regular place of business for the performance of the public trustee's official duties. In all cases, the office of the public trustee shall be kept open for the transaction of business during county business hours each day, except Saturdays, Sundays, and legal holidays.

COMMENTS: THIS SECTION WAS AMENDED IN THE 2019 LEGISLATIVE SESSION(3) The board of county commissioners shall furnish, at the expense of the county, all office supplies, including books, forms, and stationery necessary for the use of the public trustee in carrying out the provisions of this section and sections 38-37-101 and 38-37-104, subject to the provisions of section 38-37-104 (3).(4) In lieu of the bond required by subsections (1) and (2) of this section, a county may purchase crime insurance coverage on behalf of the public trustee to protect the people of the county from any malfeasance on the part of the public trustee and his or her employees.

38-37-103. Deputy trustee - successor in office.

Each public trustee may appoint deputies who shall have the same power in all respects as the public trustee. All acts of a deputy public trustee shall have the same effect as though performed by the public trustee. If a public trustee dies, resigns, or is removed from office, or if a public trustee's term of office expires after selling any property under the term of a deed of trust and before executing a certificate of redemption or deed for the property, the public trustee's successor in office shall execute the certificate or deed in the same manner that the public trustee making such sale might have done.

COMMENTS: 1. You may deputize as many or as few of your staff as you prefer. Examples are below, including example of a Public Trustee Oath. These oaths should be recorded as part of the public record. 2. Only a deputized public trustee may conduct a sale or execute documents such as releases, withdrawals, deeds, and certificates. 3. The last sentence ensures that a new public trustee can and will complete the duties initiated by the prior trustee. The foreclosures underway may continue and post-sale documents are executed as if the new trustee had conducted the sale. 4. The law is silent with respect to how the office conducts business during a vacancy. The intent here, and also in Article XII, section 1 of the Colorado constitution appears to be to maintain continuity of operations of the public office. Thus, deputies of a public trustee who have died, resigned, or been removed from office should be able to continue to act as deputies of the office until a new public trustee assumes the office. 5. When someone leaves employment with the public trustee, you should also revoke their deputization and have that recorded as well.

38-37-104. Duties of public trustees - fees, expenses, and salaries - reports.

(1) The public trustees of each county of this state shall perform the functions and exercise the powers conferred upon them by statute. They shall be entitled to receive as fees for such services the following sums and no other fees or perquisites:

COMMENTS: 1. The law is very specific that you may not create additional fees beyond those described here and other statutory fees such as the cost of copies. Examples of fees that are prohibited include: A. You may not charge a differential fee for foreclosures or releases based the manner of filing except to the extent that the fee covers costs you will pay to a third party under subparagraph (b)(I)(X). B. You may not charge a fee for access to information on your website except to the extent that the fee covers a per-user cost you will pay to a third party under subparagraph (b)(I)(X). C. You may not charge a fee for providing information to the holder or borrower, such as cure statements, affidavits of mailing or publication, or invoices, except as covered under the statutory fee for making a copy. D. You may not charge a fee to cover the cost of labor required to perform these duties. For example, you may charge a fee to recover the materials costs of a 38-38-103(1) mailing (envelopes, postage, paper) under

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subparagraph (b)(I)(X), but you may not add in the time involved as part of the fee. Labor is paid for by the statutory foreclosure fees. 2. Other allowable fees are scattered throughout Article 38, including those relating to deferments.

(a) For executing a release of a deed of trust, the sum of fifteen dollars;(b) For performing a foreclosure under article 38 of this title, the following sums, which shall be cumulative:(I) For opening and administering a foreclosure under the powers conferred upon them by a deed of trust pursuant to section 38-38-101 where the original principal amount of the debt secured by such deed of trust does not exceed four hundred eighty thousand dollars, a fee of one hundred fifty dollars and, where such amount exceeds four hundred eighty thousand dollars, a fee of one thirty-second of one percent of such original principal amount or the outstanding principal balance, whichever is less, but in no case less than one hundred fifty dollars;

COMMENTS: 1. This fee is for “opening and administering a foreclosure.” Some auditors argue that this fee is earned in full when the foreclosure is opened; others argue that the fee is not earned until the administration of the foreclosure is complete, when the property is deeded or the foreclosure withdrawn. The latter course of action, holding the deposit in escrow until the work is complete, provides smoother cash flow that is important when foreclosures are declining. As you must move excess revenue out of your office each quarter under subsection (3), and because a complete foreclosure will last across several quarters, if you credit the $150 fee immediately, you may find that you do not have enough money in your account to complete the foreclosure. 2. The fee is subject to partial or full forfeiture under 38-37-110 if you miss the deadlines of 38-38-102(1) or 38-38-103(1). By a forfeiture, one is involuntarily divested of specific property without compensation as a consequence of some act forbidden by law. Although neither statute nor appellate case law specific addresses this particular situation, because the public trustee is a county official and the county would still benefit if fees inured to the benefit of the county in this circumstance, it is logical to interpret this to mean that any forfeited fee would be refunded to the holder conducting the foreclosure that was required to pay the fee. 3. The fee is based on the lesser of the original principal balance or the outstanding principal balance. This is the outstanding balance on the evidence(s) of debt secured by the deed of trust being foreclosed. If the holder is foreclosing on only part of the encumbered property under 38-38-101(3), the outstanding balance is NOT pro-rated to cover the partial foreclosure. The fee is based on the full principal amount outstanding. However, if fewer than all of multiple instruments secured by the deed of trust are the subject of the foreclosure, under 38-38-101(7), the references to original principal balance and outstanding principal balance would apply to only the evidence(s) of debt concerning which the holder has elected to foreclose.

(II) For accepting the filing of a notice of intent to redeem pursuant to section 38-38-302, the sum of fifty dollars per notice;COMMENT: The fee is for accepting the notice. If you later disallow the redemption for any reason (such as satisfaction of the lien, discovery that the lien is senior rather than junior, or that the lien was not valid against the property), you do not refund this fee. The lienor is responsible for having a valid lien.

(III) For processing and executing a certificate of redemption pursuant to section 38-38-402, the sum of thirty dollars;COMMENT: Be sure to add this fee and the cost of recording the certificate to the amount listed on the redemption statement to be paid by the redeeming lienor.

(IV) For executing a confirmation deed pursuant to section 38-38-501, the sum of thirty dollars;COMMENT: The fee is subject to partial or full forfeiture under 38-37-110 if you miss the deadlines of 38-38-501.

(V) For processing withdrawals pursuant to section 38-38-109 (3) (a), the sum of thirty-five dollars;COMMENT: This applies to all withdrawals, including those following a cure. Include this in your fees and costs that must be paid to cure.

(VI) For processing an administrative withdrawal pursuant to section 38-38-109 (3) (b), the sum of fifty dollars;(VII) For recommencing the foreclosure after reinstatement where a sale was held in violation of the automatic stay provisions of the federal bankruptcy code of 1978, title 11 of the United States Code, as amended, pursuant to section 38-38-109 (2) (c) (II), the sum of fifty dollars;

COMMENTS: 1. 38-37-104(1) says the only collectible fees are those specified there. No fee is specified for injunction or set aside, apparently no fee is collectible in that circumstance. 38-38-109(2)(d) says that the “procedures” are the same where a sale is enjoined or set aside, but the fee provisions of 38-37-104(1) are silent as to any fee for these actions by the public trustee. 2. In order to distinguish this situation from the following subparagraph, it is useful to think of this as “resuming” the sale. “Recommencing” implies “rebeginning” or “restarting” by re-recording the NED. While that would be the case in (VIII) below, usually you would not need to re-record the NED after a sale held in violation of the automatic stay.

(VIII) For recommencing the foreclosure after bankruptcy where publication was not completed pursuant to section 38-38-109 (2) (b) (I), the sum of seventy-five dollars;

COMMENTS: 1. 38-37-104(1) says the only collectible fees are those specified there. No fee is specified for injunction or set aside, apparently no fee is collectible in that circumstance. 38-38-109(2)(d) says that the “procedures” are the same where

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a sale is enjoined or set aside, but the fee provisions of 38-37-104(1) are silent as to any fee for these actions by the public trustee. 2. In order to distinguish this situation from the previous subparagraph, it is useful to think of this as “restarting” the sale. “Recommencing” means “restarting,” by re-recording the NED, unlike in (VII) above

(IX) For performing the actions described in section 38-38-101 (9), the sum of one hundred dollars;COMMENT: These actions are to record an amended NED, set a new sale date, mail an amended combined notice, and publish a notice of sale to reflect the partial release of property from the deed of trust during the foreclosure.

(X) The sum of all amounts paid by the public trustee to third parties in connection with processing a foreclosure, including all recording, filing, publication, and electronic transmission fees; except that, for conducting a public foreclosure sale by means of the internet or another electronic medium pursuant to section 38-38-110 (1), the public trustee may collect no more than sixty dollars;

COMMENTS: 1. This provision allows you to recover all the external costs you actually incur from third parties in relation to a specific foreclosure. Most of these are simple to identify: the fees charged by the clerk and recorder for recording documents, the cost of publication, and any fee charged by the provider of your foreclosure software. Other fees are less common but also easy to link to a specific file: the cost of consultation with an attorney about a specific foreclosure, fees associated with a wire transfer of funds, or the cost of returning an original note via certified mail. 2. Any fees collected under this provision must be offset by an actual expense. The collection of money under this subparagraph should result in zero net revenue to the office. 3. This provision also allows you to recover the cost of mailing combined notices under 38-38-103(1) and elsewhere in the law to the extent that they are paid to a third party. Such costs include postage, envelopes, paper, ink, and copies of the statutes and educational material under 38-38-704. This does not allow you to charge for staff time involved in assembling the mailing. That is paid for by the foreclosure fee in subparagraph (I). A. In the opinion of the PTAC attorney, the proper way to handle this cost is to charge the actual costs to the file. Track the actual postage used for the file (which will be the majority of the cost), as well as the cost of the envelopes and other materials to the extent that it is cost-effective to count them. These “office supplies” can only be included if they are paid for by the public trustee. If they were provided by the county under 38-37-102(3), you cannot charge for them. Doing so will result in a net revenue to the public trustee, which if used to pay salary would be a conversion of public funds to private use. 4. This restricts the collection for the cost of an electronic foreclosure sale. It appears that the public trustee can pay whatever he wants for the sale but reimbursement is limited. Paying more than the allowed collection amount could be viewed by the public and the state as poor use of public funds. This statute also means that newspapers can charge whatever they want and the charge can be passed on to the holder (and therefore the borrower), but electronic sale providers are likely to be effectively limited in what they can charge because of the limitation on the amount of the charge for a foreclosure sale conducted electronically that a public trustee can pass on to the holder. 5. The drafter of the statute has advised PTAC legal counsel that the deletion of the words “but not limited to” was intended only to delete surplus language and not to limit the third party costs incurred by a public trustee that can be passed on to the holder. This is consistent with Colorado appellate case law stating that the quoted phrase is surplusage when, as in this statutory provision, it follows the word “including.”

(XI) For processing a rescission of sale pursuant to section 38-38-113, the sum of one hundred dollars; andCOMMENT: Most of these fees are “cumulative.” If the fees accumulate in excess of the initial deposit, you may carry the balance until the foreclosure is either being withdrawn or taken to sale. The rescission fee and the cost of recording the rescission notice must be paid before performing the acts. The attorney is also required to provide stamped envelopes for mailing this notice.

(XII) For rescheduling a sale after a rescission of sale pursuant to section 38-38-113 (4), the additional sum of fifty dollars.COMMENT: Unlike the rescission fee itself, this fee does not need to be paid prior to rescheduling the sale and incurring the additional costs of publication and another mailing.

(c) For performing any duty of the public trustee pursuant to section 38-30-171 (3) (b), 38-30-173 (3) (b), or 38-34-104, the sum of twenty-five dollars or such greater amount as may be approved by a court of competent jurisdiction; and(d) For performing duties pursuant to section 38-35-126 (1), an additional annual fee of seventy-five dollars, payable in advance, for each taxable year, or portion thereof, during which an escrow account is established. (2) (a) The salary of the public trustee in the different counties of the state shall be fixed at the following amounts, to wit: In counties of the second class, twenty-six thousand dollars per annum for full-time public trustees and, in counties of the third class, six thousand five hundred dollars per annum.(b) For public trustees whose terms begin on or after July 1, 1998, but prior to January 1, 2003, the salary of the public trustee in the different counties of the state shall be fixed at the following amounts, to wit: In counties of the second class, thirty-two thousand dollars per annum for full-time public trustees and, in counties of the third class, eight thousand dollars per annum; except that, in the city and county of Broomfield, such salary shall be as set forth in its annual budget.(b.3) (I) For public trustees whose terms begin on or after January 1, 2003, except as otherwise provided in subparagraphs (II), (III), or (IV) of this paragraph (b.3), the salary of the public trustee in the different counties of the state shall be fixed at the following amounts, to

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wit: In counties of the second class, forty-eight thousand five hundred dollars per annum, and in counties of the third class, twelve thousand five hundred dollars per annum.(II) For public trustees who are serving in office on or after the effective date of this paragraph (b.3), as amended, the salary of the public trustee in the different counties of the state shall be fixed at the following amounts, to wit: in counties of the second class, fifty-six thousand five hundred dollars per annum; and in counties of the third class, twelve thousand five hundred dollars per annum.(III) For public trustees in counties of the second class who are serving in office on or after February 1, 2009, the salary shall be fixed at sixty-four thousand five hundred dollars per annum.(IV) For public trustees in counties of the second class who are serving in office on or after February 1, 2010, the salary shall be fixed at seventy-two thousand five hundred dollars per annum.

COMMENTS. 1. County classifications are in 38-37-105. 2. The charter of the City and County of Denver specifies that the city clerk will receive no additional compensation for exercising the duty of public trustee

(V) For public trustees in counties of the second class wherein the county treasurer serves as the public trustee, the salary shall be fixed at twelve thousand five hundred dollars per annum.

COMMENTS: THIS SECTION WAS AMENDED IN THE 2019 LEGISLATIVE SESSION(b.5) (a) Prior to July 1, 2020, public trustees in counties of the second class appointed by the governor may collect benefits in addition to their salary that do not exceed benefits received by other elected county officers within their county.(b) This subsection (2) (b.5) is repealed, effective July 1, 2020.

COMMENTS: THIS SECTION WAS AMENDED IN THE 2019 LEGISLATIVE SESSION(c) Such salaries shall be paid from the fees collected by the public trustee as provided in this section and not otherwise.

COMMENT: The public trustee salary is not guaranteed. See subsection (3). From its revenue, each quarter the office first pays its personnel and operating expenses as described in subsection (3), and then pays the officer’s salary up to the amount specified in this subsection. At the end of each quarter, the officer transfers any remaining money in the operating account to the operational reserve, up to the maximum amount permitted to be in the reserve. After the operational reserve is at the required level, any remaining money in the operating account is paid to the public trustee salary fund on a quarterly basis. At the end of the year, if the officer did not receive the full salary but there was money transferred to the salary fund during the year, the board of county commissioners certifies the transfer of money only from that salary fund to cover the salary shortfall for that year. Subsection (3) prohibits the use of other money, which would include general fund money and the money in the operational reserve, to pay any shortfall in the public trustee salary.

(3) The public trustee of each county shall quarterly make and file with the board of county commissioners of the county a full and complete statement under oath of all transactions of the office of the public trustee and shall, upon the approval of said report, pay to the county treasurer all sums that the public trustee has received as fees in excess of the amount of salary then due to the public trustee and in excess of all necessary and reasonable expenses for staff wages and any benefits provided pursuant to county personnel policy and other expenses incidental to the conduct of the office of the public trustee for the quarter ending at the time of such report, which moneys shall, by the county treasurer, be placed to the credit of a fund to be known as the public trustee salary fund. The public trustee shall, before remitting such excess funds, retain such excess funds in a special reserve fund, which fund shall be maintained in a separate interest-bearing account as permitted under section 38-37-113, until such special reserve fund, including accrued interest, reaches an amount equal to the public trustee's total operating expenses and authorized salary for the previous fiscal year, as filed pursuant to this subsection (3). If, in any particular quarter, the public trustee's operating expenses and authorized salary exceed the fees collected in the quarter, the public trustee may draw on the special reserve fund to cover the public trustee's operating expenses and authorized salary for that quarter. At such time as the special reserve fund has reached the permitted amount, excess funds shall be paid to the county treasurer to be placed in the public trustee salary fund. At the expiration of each year, the county treasurer shall, out of any moneys in the public trustee salary fund and not otherwise, pay to the public trustee such an amount, if any, as may be still due to the public trustee on account of the public trustee's salary for that year just expired, such payment to be made only upon the certificate of the board stating the amount of such salary still remaining due and unpaid, and the balance of said fund shall thereupon be transferred to the general fund of the county.

COMMENTS: 1. The amount required in the operational reserve is only the amount of the prior year’s operational expenses. It does not include money paid as part of the fiduciary duties of the office, or money paid as a “pass-through” to third parties. See the comments to 38-37-113(2) for a discussion of these types of money. 2. The special reserve (usually called an “operational reserve”) is required to be separate from the other accounts of the office. 3. Pay your own and staff wages and benefits and other expenses that are necessary and reasonable for the operation of the office. 38-37-102(3) requires that the county provide “all office supplies” to the office, which will reduce these expenses. See Comments to 38-37-102(3). 29-1-201 encourages cooperation among governments, which might allow the public trustee and the county to reach an agreement regarding how to allocate the cost of salaries and benefits for personnel performing both treasurer and public trustee duties. The public trustee salary must come only from the office revenue.

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4. At the end of each quarter, you must account for your revenue and expenses. If there is a surplus, you pay into the operational reserve up to the maximum amount permitted by law. If there remains revenue in excess of the operational expenses after the reserve is full, that excess revenue is paid to the “Public Trustee Salary Fund” held by the treasurer. If there is a deficit, you should not pay your salary to the extent of the deficit. 5. The law does not specify how money from the operational reserve would be used by the public trustee or who has the authority to transfer funds from it to the public trustee operating account. However, logically the public trustee can withdraw from that account on a quarterly basis to cover a deficit in the operational account in any quarter to cover operating expenses not including the public trustee salary. 6. The excess revenue deposited into the salary fund is held in the salary fund until the end of the year. If the public trustee has been unable to receive full salary during the year and there is money in the salary fund (this would require that revenues early in the year were high, but dropped later in the year), the Board of County Commissioners must certify release of money from this fund to cover the salary shortfall. Any remainder of that fund is transferred to the county general fund upon certification of the Commissioners covering any salary shortfall.. 7. The report of transactions should be detailed enough to allow review of your operations. Something along the lines of “Revenue = X, Expenses = Y, Balance = Z” would not be a “full and complete” report. The level of detail should be something like: A. Revenue received by public trustee office I. Number of deeds of Trust released II. Number of Notices of Election and Demand recorded to start a foreclosure III. Revenue earned from releases of deeds of Trust IV. Revenue earned from statutory foreclosure fees V. Revenue earned from interest VI. Other revenue. B. Expenditures allocated to performance of public trustee duties I. Salary paid to the public trustee II. Salary paid for staff wages III. Public trustee and staff benefits provided IV. Other expenses C. Funds to be transferred to or from the Special Reserve Fund D. Funds to be transferred to the Public Trustee Salary Fund held by the county treasurer

(4) Deleted 1/1/2008(5) (a) Any person other than a county treasurer serving as a public trustee who has been appointed by the governor shall report to the governor at such times and on such matters as the governor may require.(b) This subsection (5) is repealed, effective July 1, 2020.

COMMENTS: THIS SECTION WAS AMENDED IN THE 2019 LEGISLATIVE SESSION(6) The public trustee of each county shall adopt a budget pursuant to the requirements of part 1 of article 1 of title 29, C.R.S., and shall submit the budget to the board of county commissioners of the county in which he or she serves for review by the board.

COMMENTS: 1. See the comments provided later in this document for discussion of how to do this. 2. The legislative intent of “review by the board” does not include a power to modify the submitted budget.

(7) The office of the public trustee is subject to annual audit pursuant to the "Colorado Local Government Audit Law", part 6 of article 1of title 29,C.R.S.; except that the office of the public trustee of any trustee who is appointed by the governor shall instead be subject to an individual annual audit pursuant to section 29-1-603 (1.5), C.R.S.

COMMENTS: 1. The Colorado Local Government Audit Law allows the public trustee, defined as an agency of the county for this law, to have its audit be part of the overall county audit. Elected treasurer/public trustees do not need to conduct an individual audit, and 29-1-603(1.5) states that those audits “shall” be included in the county audit.2. Public trustees who are appointed by the governor must have a separate audit. The referenced law is not included in this manual since those offices receive direction on the application of the law from the governor.

(8) Each public trustee who is appointed by the governor shall be subject to the state "Procurement Code", articles 101 to 112 of title 24, C.R.S., for any purchase of twenty thousand dollars or more and for any multiple year purchase agreement; except that, if the procurement rules established for the county in which the public trustee serves require an open and competitive bidding process, the public trustee may apply the county procurement rules.

38-37-105. Classification of counties for purposes of regulating fees and salaries of public trustees. (1) For the purpose of providing for and regulating the fees and salaries of public trustees, the said several counties of this state are classified with reference to population and divided into three classes, as follows:(a) Class 1: City and county of Denver;

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(b) Class 2: Adams, Arapahoe, Boulder, Douglas, El Paso, Jefferson, Larimer, Mesa, Pueblo, and Weld;(c) Class 3: Alamosa, Archuleta, Baca, Bent, city and county of Broomfield, Chaffee, Cheyenne, Clear Creek, Conejos, Costilla, Crowley, Custer, Delta, Dolores, Eagle, Elbert, Fremont, Garfield, Gilpin, Grand, Gunnison, Hinsdale, Huerfano, Jackson, Kiowa, Kit Carson, Lake, La Plata, Las Animas, Lincoln, Logan, Mineral, Moffat, Montezuma, Montrose, Morgan, Otero, Ouray, Park, Phillips, Pitkin, Prowers, Rio Blanco, Rio Grande, Routt, Saguache, San Juan, San Miguel, Sedgwick, Summit, Teller, Washington, and Yuma.

COMMENTS: 1. There is no place in the law where the fees of public trustees vary based on the county classification. See Comments to 38-37-101 concerning Pitkin County. 2. The charter of the sole class 1 county, Denver, specifies that the city clerk will perform the duties of public trustee without additional compensation.

38-37-106. Public trustee to act as successor in trust - additional duties. (1) It is the duty of all public trustees of the several counties of the state of Colorado to accept and discharge the duties of trustee or successor trustee in accordance with the provisions of section 38-34-104 and to accept and discharge those duties of the public trustee prescribed by sections 38-30-171 (3) (b) and 38-30-173 (3) (b).

COMMENT: This subsection points out three areas, outside articles 37-39, that specify public trustee duties. 38-35-126 also includes public trustee duties outside these primary articles.

(2) Whenever any deed of trust names the wrong public trustee or omits the name of the county of the public trustee in a deed of trust containing a grant to a public trustee and a provision for a power of sale, the public trustee of each county where the property or any portion thereof is located shall act as a successor public trustee or as if the public trustee and county were named in the deed of trust. A public trustee so acting shall have all powers, authority, and duties as if originally named in such deed of trust with respect to the portion of the property located in such county.

COMMENT: 1. This subsection is unrelated to the first subsection. The deed of trust must encumber property within the public trustee’s county and also be recorded in that county. If the deed of trust covers property in more than one county, it must be handled by each county’s public trustee with respect to the property in that county. The public trustees of these counties may cooperate to accomplish these duties. See 38-37-111. 2. It also states that the public trustee may act if the deed of trust omits the name of the county (but still references a public trustee) or names the wrong county. This should be read together with 38-39-101, which states that a deed of trust that does NOT name a public trustee is in fact a mortgage and must be foreclosed as a mortgage rather than as a deed of trust, to mean that a public trustee can release a deed of trust on these same terms.

38-37-107. Fees under successor trusteeship.Said public trustees, for the performance of services in section 38-37-106, shall be allowed to charge and receive only such fees as are allowed by law for the performance of like services under deeds of trust wherein such public trustees are named as trustees.

COMMENT: 1. This section appears to apply only to 38-37-106(2) in stating that we do not charge any additional fees if the wrong county name is on the deed of trust. 2. The services listed in 38-37-106(1) do not relate to deeds of trust and are compensated as described in 38-37-104(1)(c) and (d).

38-37-108. Payments to public trustee.(1) All moneys payable to a public trustee at any foreclosure sale under the provisions of this article or upon redemption or cure pursuant to article 38 of this title shall be in the form of cash, electronic transfer to an account of the public trustee available for such purpose and in compliance with the conditions placed on the account by the public trustee for such electronic transfer, or certified check, cashier's check, teller's check, or draft denominated as an official check that is a teller's check or a cashier's check as those terms are defined in and governed by the "Uniform Commercial Code", title 4, C.R.S., made payable to the public trustee, and certified or issued by a state-chartered bank, savings and loan association, or credit union licensed to do business in the state of Colorado or a federally chartered bank, savings bank, or credit union.

COMMENTS: 1. These limits on the form of payment apply only to payments for sale, cure, and redemption. Other payments, including the foreclosure deposits by attorneys for the holder, releases, withdrawals, deeds, intents to redeem, and redemption certificates may be in any form allowed by your policies.

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2. Cash is always acceptable. Additional paperwork must be completed for cash transactions of $10,000 or more following IRS and Homeland Security regulations. If you receive large quantities of cash, it is wise to count it twice (by different people if possible) in the presence of the person paying and get it checked promptly. You can get counterfeit detection markers from your bank. UV counterfeit detection lights are inexpensive and work with credit cards, also. If you accept counterfeit money, it is your loss. The bank is not required to reimburse you. 3. Electronic transfers can take many forms. The traditional “wire” transfer is best, and you may require the person paying to cover any fees charged by your bank under 38-37-104(1)(b)(X). The “ACH” deposit is not much more reliable than a personal check, and it is not a good idea to allow that type of payment. An ACH deposit generally takes at least four days from day of issue to actually clear the bank. NSF deposits may not show up for a substantially longer period of time. 4. Most commonly, you will receive a check. Inspect such checks to ensure that the check: A: is payable to you as public trustee, B: is properly signed – with 2 signatures if the check says they are required,

C. is issued by an acceptable bank, andD. for sales, cures and redemptions is one of the four types listed: certified, cashier’s, teller’s, or official. These terms are defined in Article 3 of Title 4, as referenced in 4-3-103(b). Some banks issue checks with their own creative titles (a common example is a “treasurer’s Check” issued by a credit union); these cannot be accepted unless they also have “Official Check” on the check. 5. In principle, these checks and ACH transfers can be stopped by the payer. They also could be forged or altered. The PTAC attorney’s advice is to in all cases confirm with your bank when funds have been finally credited to your account, but in every case to give at least three business days for the clearance of funds drawn on banks within our Federal Reserve District and write the proceeds check no sooner than the 4th

business day after deposit. For checks written by more distant banks, you may need to hold funds for substantially longer. 6. It is a bad idea to accept a partial payment for any of these purposes, especially cures and redemptions. You will end up holding money for some time while waiting for the balance of the payment to be made and will have to return the funds to the person who partially cured or redeemed if the balance is not paid. Acceptance of the partial payment could also be used as the basis for a claim against the public trustee or the foreclosure process – a claim unlikely to succeed in court, but something with which you would have to deal.

(2) As used in this section, “electronic transfer” means a transfer of funds initiated by using an electronic terminal, telephonic instrument, or computer or magnetic tape to order or authorize a financial institution to credit or debit an account. “Electronic transfer” payments do not include transactions originated by check, draft, or similar paper instrument.

COMMENT: This section updates and broadens the definition of electronic transfers. Previously, electronic transfers were primarily Automated Clearing House (ACH) and wire transfers. Now, the term encompasses self-generated authorizations originating the in paperless form that permit a financial institution to debit or credit the bank account.

38-37-109. Suits against public trustee.When public trustees, or county treasurers acting as trustees, are sued in their official capacity, the district attorney shall provide legal representation for the public trustees serving in such district attorney's district, unless such legal representation is provided for otherwise.

COMMENT: Generally speaking, the district attorney does not provide this representation. Public trustees usually use the services of their county attorney, retain private counsel, or both.

38-37-110. Public trustee forfeits fees for failure to meet statutory time requirements - validity of foreclosure unaffected.If the public trustee fails to meet the time requirements set forth in section 38-38-102 (1), 38-38-103 (1), or 38-38-501, the foreclosure sale and confirmation deed shall be valid notwithstanding such failure, and the public trustee shall forfeit five percent of the public trustee's fees provided for in section 38-37-104 (1) (b) (I) and (1) (b) (V) for each day the public trustee fails to meet the time requirements, and, if the fees have already been paid, the forfeited portion thereof shall be returned immediately to the person who paid them.

COMMENTS: 1. It seems reasonable to separate this into two penalties – one for failure to execute and administer the foreclosure on time and the other for failure to execute and record the confirmation deed on time. 2. 38-38-102(1) gives you ten business days from the receipt of a foreclosure filing under 38-38-101 to review the filing and either reject it or have the NED recorded. If you are only waiting for a determination of the agricultural

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status under 38-38-108, record the NED and set the sale date when status is determined, remembering that the deadline for determining that status is 20 calendar days after the NED recording, which is the same deadline as for the first mailing of the combined notice under 38-38-103(1)(a), which must include the sale date. The forfeiture would be $7.50 per day for a standard foreclosure, presumably calendar days since the type of day is not specified. 3. Failure to meet the deadline to mail either of the combined notices under 38-38-103(1) is cured per 38-38-705(1) by restarting the foreclosure. In addition, this forfeiture of $7.50 per day for a standard foreclosure also applies, presumably calendar days since the type of day is not specified. This appears to apply only if the notice was not sent on time and not if there was some error in the notice that required a re-start of the foreclosure. This provision by its terms appears to apply only to a failure to meet the two specific deadlines in 38-38-103(1) and not to the other notice deadlines (all of which refer back eventually to 38-38-103). 4. 38-38-501, for foreclosures with an NED recorded after 9/1/12, requires you to issue and record the confirmation deed by the end of the 15th business day after the vesting of title, so by the end of the 23rd business day after sale if there were no redemption periods, or by the end of the 34th business day after sale if there was one redemption period,. Although this penalty existed in the old law, there was no actual specified deadline for issuance of the deed after it is requested. The reference to 38-37-104(1)(b)(V) appears to be a typo for 38-37-104(1)(b)(IV), since subparagraph (V) is the fee for withdrawing a foreclosure. The fee would be $1.50 per day, calendar day because it is unspecified, to be returned the person paying – which via a series of passed-through costs is the certificate holder who will get the deed. 5. One must assume these penalties are automatic. They do not require that the holder or the new owner request the refund.

38-37-111. Public trustees authorized to cooperate and contract with one another and others.

One or more of the public trustees of the several counties of the state are hereby authorized and empowered to cooperate and contract with any other public trustee and with others for the purpose of providing any function, service, or facility, including legal services and representation, that are necessary and desirable to fulfill their lawful duties.

COMMENTS: 1. This creates the legal basis for the Public Trustee Association of Colorado. 2. This also allows us to contract outside our offices for duties performed. 3. In the opinion of the PTAC attorney, this also allows a public trustee to stand in for another, for example if a foreclosure on property owned by a close family member might present the appearance of a conflict of interest. An intergovernmental agreement should be entered into between the offices in that case and recorded as part of the foreclosure to provide record notice of the authority of the other office to conduct the foreclosure.

38-37-112. Powers of public trustees when counties are formed or when county boundaries change.The public trustee of each county is declared to be the proper public trustee to issue public trustee's deeds, certificates of purchase, certificates of redemption, releases of deeds of trust, and all other documents required of a public trustee for all property located in that public trustee's county at the time of execution of such documents by the public trustee or at the time the deed of trust was recorded in that county. All such documents may be recorded in either county. Each public trustee is also authorized to make sales and perform all acts required of a public trustee in connection with property located in that public trustee's county at the time of performance of such acts by the public trustee or at the time the deed of trust was recorded in that county. All acts that have been performed and all documents that have been executed by any public trustee in compliance with this section are validated.

COMMENTS: 1. Since 1930, the only county boundary changes in Colorado have been annexations into Denver from Adams (most recently 1988), and Arapahoe and Jefferson (most recently 1994), and the creation of the City and County of Broomfield in 2001 from parts of Adams, Boulder, Jefferson, and Weld Counties. It is unlikely that any live deeds of trust remain from 1930 that the Routt County Public Trustee might need to handle. 2. For those 7 counties, either the public trustee of the county in which the land was located when the deed of trust was executed or the public trustee of the county in which the land is now may act. The deed of trust may have been recorded in either county. Thus the Broomfield public trustee could foreclose on property that was formerly in Adams County even though the deed of trust was recorded in Adams County. This is the only exception to the rule about acting only with respect to deeds of trust recorded in your own county.

38-37-113. Checking account - custodial funds.

(1) In the performance of his or her duties under this article and article 38 of this title, the public trustee of each county shall have the authority to establish and manage one or more of the following accounts: An automated clearing house account, checking account, escrow

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account, custodial account, similar banking services, or similar overnight depository account with a bank or savings and loan association that is an eligible public depository under the "Public Deposit Protection Act", article 10.5 of title 11, C.R.S., or the "Savings and Loan Association Public Deposit Protection Act", article 47 of title 11, C.R.S. A public trustee may also participate in local government investment pool trust funds as described in part 7 of article 75 of title 24, C.R.S., and invest public funds in eligible money market mutual funds described in part 6 of article 75 of title 24, C.R.S.

COMMENTS: 1. It is very important that your funds be held in an account covered by PDPA or SLAPDPA. Your balances may well exceed the amounts covered by FDIC, and you would be breaching your fiduciary duties if the bank failed. 2. The investment funds described are most likely applicable to the operational reserve described in 38-37-104(3).

(2) Other than fees and costs, which shall be governed by section 38-37-104, all moneys received by a public trustee for the purposes of a cure, a bid, excess proceeds, or a redemption under article 38 of this title shall be held as custodial funds for the party entitled to receive such moneys. Any moneys that a holder of an evidence of debt is entitled to receive may be transmitted electronically to the attorney for the holder in the manner set forth in a memorandum of understanding between the attorney for the holder and the public trustee. All electronic transmission fees and costs between the office of the public trustee and the attorney for the holder shall be an additional fee and cost of the foreclosure.

COMMENTS: 1. You receive three primary types of funds in the course of your duties: A. Fiduciary funds, which are the proceeds from payments made for a cure, redemption, or sale. These funds must be paid in the forms described in 38-37-108. These funds are not revenue of the office, according to 29-1-102(8)(b) and (16), because they are required to be paid to another person or entity. These funds should be held until finally credited to your account (not provisionally credited) to avoid the risk of expense to double payment. B. “Pass-through” funds, which is money received that will be payable to a third party, most commonly the clerk and recorder, the publisher of your combined notices, and the provider of your foreclosure processing software. Pass-through funds may also include other payments, such as the cost of mailing notices, wire transfer fees, or legal advice on a specific case, as described in 38-37-104(1)(b)(X). These funds are not revenue of the office according to 29-1-102(8)(b) and (16) because they are required to be paid to another person or entity. See Comments under 38-37-108 concerning how long these funds should be held before being disbursed. C. Earned revenue from statutory fees, as described in 38-37-104(1). This money would be available immediately in the operational account to pay the general expenses of the office. 2. Depending on the amount of money received by your office, you may want to have two or three separate accounts. One account would hold your operational funds, the earned revenue from statutory fees as described in 38-37-104(1). Another account would hold your fiduciary and “pass-through” funds in escrow. If your revenue is large enough, you may want to separate the foreclosure and release escrows into two accounts. If your volume of work is low enough that there would be a risk that you would sometimes have a zero balance in the escrow account, you may keep everything in a single account, but be very careful with your internal accounting of the funds.3. Many of your payments received will include a mixture of all three types of money. For examples: A. A check paid to release a deed of trust will include the $15 statutory fee and the money needed to pay for recording the release (usually $11). Deposit this into the escrow account, pay the clerk $11 to record the document, and transfer the $15 into the operational account as revenue. B. The deposit check paid to start a foreclosure will include pass-through costs to be paid almost immediately (software, NED recording), pass-through costs to be paid later if they occur (mailing, publishing, COP/withdrawal/deed recording), the statutory foreclosure fee (see comment to 38-37-104(1)(b)(I)), the fee for either withdrawal or deed, and money that would be available for other possible fees and costs. The fee revenue will be transferred to the operational account when earned, the pass-throughs will be paid when billed, and the remainder needs to remain in the escrow account until either a fee is earned or a bill invoiced. At the end of the foreclosure, you may have money remaining from this deposit that must be returned to the attorney or you may need to receive additional money before taking the property to sale or withdrawing the foreclosure. C. A cure payment will include the money due to the holder as well as fees and costs of the public trustee. The fees and costs may or may not be covered by the deposit check from the attorney for the holder so you may be requiring an additional payment from the attorney or refunding the unspent balance of those costs to the attorney. The proceeds from the cure payment will go to the holder, in care of the attorney, along with the possible refund to the attorney. There also may be a refund owed to the person making the cure payment if the cure letter included estimated public trustee costs, such as publications that will now be cancelled. 4. The proceeds check should be written to the party entitled to receive they money – the holder of the evidence of debt in case of a cure or sale; the holder of the COP or previous COR in case of a redemption. Most attorneys would not want you to write the proceeds check payable to their office, or send the funds to them electronically to be reissued by them to their client, as that adds extra steps to the process. This delays receipt of cure proceeds in particular, and you have no way of knowing if the holder has received the funds.

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5. It is best to send the proceeds check from a cure or sale (payable to the holder) to the attorney’s office by certified mail so you can ensure receipt and transmission to the proper party at the holder’s institution. If you send the proceeds check directly to the holder, it is likely to go to the wrong place and not be properly credited. 6. You also may receive fees from duties under 38-30-171(3)(b), 38-30-173(3 (b), or 38-34-104 that may be deposited directly into an operating account. 7. Fees from duties under 38-35-126(1) would also go directly into an operating account, and the tax money collected would go an escrow account. 8. Money collected from other sources, such as fees charged for copies of documents, would go directly to the operating account.

(3) Nothing in this section shall lessen or otherwise modify the immunities and protections extended by law to public trustees and any governmental entity with which public trustees are associated. No contractual relationship shall be deemed to exist between a public trustee and a party entitled to receive moneys as described under subsection (2) of this section.

COMMENTS: 1. Primarily, this language minimizes your exposure to legal action in the course of your duties. Despite the lack of a contractual relationship, you have a responsibility to perform your statutory duties. 2. Sometimes you may be asked to sign documents that would describe the purchase at auction as a “real estate contract.” Do not sign these documents, because you are not the “seller” of the property as that is normally understood. This subsection justifies your not signing a contract

TITLE 38, ARTICLE 38: FORECLOSURE SALES

38-38-100.3. Definitions.As used in articles 37 to 39 of this title, unless the context otherwise requires:(1) "Agricultural property" means property, none of which, on the date of recording of the deed of trust or other lien or at the time of the recording of the notice of election and demand or lis pendens, is:(a) Platted as a subdivision;(b) Located within an incorporated town, city, or city and county; or(c) Valued and assessed as other than agricultural property pursuant to sections 39-1-102 (1.6) (a) and 39-1-103 (5), C.R.S., by the assessor of the county where the property is located.

COMMENT: This definition is different than what is used to define agricultural property purposes other than foreclosures. This is the definition to use for setting the sale date under 38-38-108.

(1.5) “Amended mailing list” means the amended mailing list in accordance with section 38-38-103 (2) containing the names and addresses in the mailing list as defined in section 38-38-100.3 (14) and the names and addresses of the following persons:(a) The owner of the property, if different that the grantor of the deed of trust, as of the date and time of the recording of the notice of election and demand or lis pendens as shown in the records at the address indicated in such recorded instrument; and (b) Each person, except the public trustee, who appears to have an interest in the property described in the combined notice by an instrument recorded prior to the date and time of the recording of the notice of election and demand or lis pendens with the clerk and recorder of the county where the property or any portion thereof is located at the address of the person indicated on the instrument, if the person's interest in the property may be extinguished by the foreclosure.

COMMENTS: 1. 38-38-702(1)(c) says that you are not responsible for the accuracy or completeness of this list. You may point out obvious omissions or inaccuracies to the attorney for the holder. 2. These items are in addition to what is on the mailing list in subsection (14).

(2) "Attorney for the holder" means an attorney licensed and in good standing in the state of Colorado to practice law and retained by the holder of an evidence of debt to process a foreclosure under this article.

COMMENT: You can verify the status of the attorney with the Colorado Supreme Court at http://www.coloradosupremecourt.com/Search/AttSearch.asp.

(2.5) “Borrower” means a person liable under an evidence of debt constituting a residential mortgage loan.(3) "Certified copy" means, with respect to a recorded document, a copy of the document certified by the clerk and recorder of the county where the document was recorded.

COMMENT: There is no legal provision for the public trustee to “certify” a copy of any document.(3.5) “CFPB” means the federal consumer financial protection bureau.(4) "Combined notice" means the combined notice of sale, right to cure, and right to redeem described in section 38-38-103 (4) (a).(4.5) “Complete loss mitigation application” means an application in connection with which a servicer has received all the information that the servicer requires from a borrower in evaluating applications for the loss mitigation options available to the borrower.(5) "Confirmation deed" means the deed described in section 38-38-501 in the form specified in section 38-38-502 or 38-38-503.

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http://www.coloradosupremecourt.com/Search/AttSearch.asp


(5.3) "Consensual lien" means a conveyance of an interest in real property, granted by the owner of the property after the recording of a notice of election and demand, that is not an absolute conveyance of fee title to the property. "Consensual lien" includes but is not limited to a deed of trust, mortgage or other assignment, encumbrance, option, lease, easement, contract, including an instrument specified in section 38-38-305, or conveyance as security for the performance of the grantor. "Consensual lien" does not include a lien described in section 38-38-306 or 38-33.3-316.

COMMENT: The term “consensual lien” is not currently used in these articles. This is presently not relevant to public trustee foreclosures.

(5.7) "Corporate surety bond" means a bond issued by a person authorized to issue bonds in the state of Colorado with the public trustee as obligee, conditioned against the delivery of an original evidence of debt to the damage of the public trustee.

COMMENT: This is most often called a “lost instrument bond” as its purpose is to replace the original evidence of debt otherwise required by 38-38-101(1)(b) and 38-39-102(1)(a)(II). Comments to those sections discuss the requirements of the bond.

(6) "Cure statement" means the statement described in section 38-38-104 (2) (a).(7) "Deed of trust" means a security instrument containing a grant to a public trustee together with a power of sale.

COMMENT: The grant to a public trustee is critical. Without this grant, the document is a “mortgage” and may not be acted upon by the public trustee – see 38-39-101.

(8) "Evidence of debt" means a writing that evidences a promise to pay or a right to the payment of a monetary obligation, such as a promissory note, bond, negotiable instrument, a loan, credit, or similar agreement, or a monetary judgment entered by a court of competent jurisdiction.

COMMENTS: 1. An evidence of debt may take many forms. Note that the “bond” referred to here is not the corporate security bond of subsection (5.7). 2..The reference to “a monetary judgment” in this provision references the possibility that a promissory note secured by a deed of trust may be reduced to judgment, in which case the deed of trust can still be foreclosed by the public trustee with the monetary judgment then constituting the evidence of debt.

(9) "Fees and costs" means all fees, charges, expenses, and costs described in section 38-38-107.(10) "Holder of an evidence of debt" or “holder” means the person in actual possession of or person entitled to enforce an evidence of debt; except that the term does not include a person acting as a nominee solely for the purpose of holding the evidence of debt or deed of trust as an electronic registry without any authority to enforce the evidence of debt or deed of trust. For the purposes of articles 37 to 40 of this title, the following persons are presumed to be the holder of an evidence of debt:(a) The person who is the obligee of and who is in possession of an original evidence of debt;(b) The person in possession of an original evidence of debt together with the proper indorsement or assignment thereof to such person in accordance with section 38-38-101 (6);(c) The person in possession of a negotiable instrument evidencing a debt, which has been duly negotiated to such person or to bearer or indorsed in blank; or(d) The person in possession of an evidence of debt with authority, which may be granted by the original evidence of debt or deed of trust, to enforce the evidence of debt as agent, nominee, or trustee or in a similar capacity for the obligee of the evidence of debt.

COMMENTS: 1. Where the evidence of debt is a note or bond (as opposed, for example, to a monetary judgment), the holder must be in possession of the original. The law may not require the presentation of that original, but the holder must still have it. 2. The holder must have authority to enforce the debt. If the evidence of debt is a note or bond the holder must be the original payee, an indorsee or, if the instrument is a note indorsed in blank, or a bearer bond, the person in possession. If the evidence of debt is other than a note or bond, an assignee takes the place of an indorsee. Whether an agent, trustee or nominee will be entitled to foreclose depends upon documentation granting the party authority to enforce the evidence of debt. 3. A “qualified holder” need not present the original evidence of debt to the public trustee, nor any proof of being in possession of it, but only the required certification which carries with it a statutory indemnification obligation. For a foreclosure, the holder or holder’s attorney certifies this via the document described in 38-38-101(1)(b)(II). For a release, the holder requests this via the language in 38-39-102(3)(a)(I).

(11) "Junior lien" means a deed of trust or other lien or encumbrance upon the property for which the amount due and owing thereunder is subordinate to the deed of trust or other lien being foreclosed.

COMMENT: Lien ordering is normally based on the order in which the lien was recorded in the county. This general rule may be altered by a court order or subordination agreement.

(12) "Junior lienor" means a person who is a beneficiary, holder, or grantee of a junior lien.(12.5) "Lienor" includes without limitation the holder of a certificate of purchase or certificate of redemption for property, issued upon the foreclosure of a deed of trust or other lien on the property.

COMMENT: Pending transfer of title, the certificate replaces the deed of trust. See 38-38-401.5 for the COP; there is no parallel language for the COR, but logically the certificate of redemption transfers the lien of the COP to the

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redeeming person lienor. See 38-38-501(1). Also 38-39-204 states that the lien of the deed of trust continues until the final disposition of the foreclosure proceeding.

(13) "Lis pendens" means a lis pendens in accordance with section 38-35-110 that is recorded with the clerk and recorder of the county where the property or any portion thereof is located and that refers to a judicial action in which one of the claims is for foreclosure and sale of the property by an officer or in which a claim or interest in the property is asserted.

COMMENT: The filing of a lis pendens has no direct effect on a public trustee foreclosure.(13.3) “Loss mitigation application” means an oral or written request for a loss mitigation option that is accompanied by any information requested by a servicer for evaluation for a loss mitigation option.(13.7) Loss mitigation option” means an alternative to foreclosure offered by the owner, holder, or assignee of a mortgage loan that is made available through the servicer to the borrower.(14) "Mailing list" means the mailing list in accordance with section 38-38-101 (1) (e), provided to the officer by the holder of the evidence of debt or the attorney for the holder containing the names and addresses of the following persons:(a) The original grantor of the deed of trust or obligor under any other lien being foreclosed at the address shown in the recorded deed of trust or other lien being foreclosed and, if different, the last address, if any, shown in the records of the holder of the evidence of debt; (b) Any person known or believed by the holder of the evidence of debt to be personally liable under the evidence of debt secured by the deed of trust or other lien being foreclosed at the last address, if any, shown in the records of the holder; (c) The occupant of the property, addressed to "occupant" at the address of the property, and;(d) With respect to a public trustee sale, a lessee with an unrecorded possessory interest in the property at the address of the premises of the lessee and, if different, the address of the property, to the extent that the holder of the evidence of debt desires to terminate the possessory interest with the foreclosure,

COMMENT: 38-38-702(1)(c) says that you are not responsible for the accuracy or completeness of this list. You may point out obvious omissions or inaccuracies to the attorney for the holder.

(15) "Maintaining and repairing" means the act of caring for and preserving a property in its current condition or restoring a property to a sound or working condition after damage; except that "maintaining and repairing" shall not include, unless done pursuant to an order entered by a court of competent jurisdiction, any act of advancing a property to a better condition or any act that increases the quality of or adds to the improvements located on a property.

COMMENT: This is very important for understanding the allowable fees and costs for a redemption statement under 38-38-302(3). Someone may try to claim improvements made to the property as part of the fees and costs allowed under 38-38-107(3)(b)(VI). This definition makes it clear that “maintaining and repairing” is a very limited concept. A public trustee should become involved in the question of whether fees and costs are allowable only with the utmost caution. See 38-38-702(1)(a) stating that a public trustee is not liable or responsible for determining the amount required to redeem under 38-38-302.

(16) "Notice of election and demand" means a notice of election and demand for sale related to a public trustee foreclosure under this article.(17) "Officer" means the public trustee or sheriff conducting a foreclosure under this article.

COMMENT: This manual excludes items that apply strictly to sheriff’s sales.(17.3) “Overbid” means the amount a property is sold for at a foreclosure sale that is in excess of the written or amended bid amount executed by the holder of the evidence of debt secured by the deed of trust or other lien being foreclosed.

COMMENT: See 38-38-111 for distribution of the overbid. (17.5) “Person” means any individual, corporation, government or governmental subdivision or agency, business trust, estate, trust, limited liability company, partnership, association, or other legal entity.

COMMENT: It bears repeating that any legal entity is a person for our purposes.(18) "Property" means the portion of the property encumbered by a deed of trust or other lien that is being foreclosed under this article or the portion of the property being released from a deed of trust or other lien under article 39 of this title.

COMMENT: Property is not limited to real property. The deed of trust also may encumber personal property and the public trustee may foreclose a deed of trust encumbering both real and personal property. See 4-9-604(2).

(19) "Publish", "publication", "republish", or "republication" means the placement by an officer of a legal notice that meets the requirements set forth in section 24-70-103, containing a combined notice that complies with the requirements of section 24-70-109, in a newspaper in the county or counties where the property to be sold is located. The officer shall select the newspaper.

COMMENTS: 1. It is advisable to have competitive bidding for the publications, and it is possible to use different publications for different foreclosures. Even if you use only one newspaper, it is a good idea to have a written contract in which you specify the cost (including a fixed rate for each publication), the timeline for providing publication proofs and affidavits of publication, and other details. 2. Under 24-70-101(4), “published” means that newspaper has an office in the county to gather news, sell advertising, or conduct the general business of newspaper publications. The mere distribution of a newspaper within your county does not generally make it eligible to print foreclosure notices. On the other hand, the fact that a newspaper is physically printed in another county does not make newspaper ineligible. 3. If the only thing lacking for a newspaper to be defined as a legal publication is that it lacks paid circulation, it is eligible under 24-70-103(4).

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4. If there is no eligible newspaper in your county, 24-70-103(3) directs you to publish in a newspaper in an adjacent county, also with the exception noted in comment 3. Only if there is also no eligible newspaper in your county or any adjacent county may you default to a newspaper that is published elsewhere but circulated in your county. Presumably, all such counties must be in the State of Colorado.

(20) "Qualified holder" means a holder of an evidence of debt, certificate of purchase, certificate of redemption, or confirmation deed that is also one of the following:(a) A bank as defined in section 11-101-401 (5), C.R.S.;(b) An industrial bank as defined in section 11-108-101 (1), C.R.S.; (SB13-154)(c) A federally chartered savings and loan association doing business in Colorado or a savings and loan association chartered under the "Savings and Loan Association Law," articles 40 to 46 of title 11, C.R.S.;(d) A supervised lender as defined in section 5-1-301 (46), C.R.S., that is licensed to make supervised loans pursuant to section 5-2-302, C.R.S., and that is either:(I) A public entity, which is an entity that has issued voting securities that are listed on a national security exchange registered under the federal "Securities Exchange Act of 1934", as amended; or(II) An entity in which all of the outstanding voting securities are held, directly or indirectly, by a public entity;(e) An entity in which all of the outstanding voting securities are held, directly or indirectly, by a public entity that also owns, directly or indirectly, all of the voting securities of a supervised lender as defined in section 5-1-301 (46), C.R.S., that is licensed to make supervised loans pursuant to section 5-2-302, C.R.S.;(f) A federal housing administration approved mortgagee;(g) A federally chartered credit union doing business in Colorado or a state-chartered credit union as described in section 11-30-101, C.R.S.;(h) An agency or department of the federal government;(i) An entity created or sponsored by the federal or state government that originates, insures, guarantees, or purchases loans or a person acting on behalf of such an entity to enforce an evidence of debt or the deed of trust securing an evidence of debt; or(j) Any community development financial institution fund that has been certified and maintains such current status from the community development financial institutions fund administered by the United States Department of the Treasury, referred to in this section as the “fund”. In order to be a qualified holder under this article, the community development financial institution must:(I) Be a legal entity;(II) Have a primary mission of promoting community development;(III) Be a financing entity;(IV) Primarily serve one or more target markets as defined by the fund;(V) Promote development services in conjunction with its financing activities; (VI) Maintain accountability to its defined target market; and (VII) Be a nongovernmental entity and not be under the control of any governmental entity; except that a tribal government is exempt from the requirements of this subparagraph (VII). (k) Any entity with active certification under the fund that originates, insures, guarantees, or purchases loans or a person acting on behalf of such an entity to enforce an evidence of debt of the deed of trust securing an evidence of debt; or (l) Any entity listed in paragraphs (a) to (k) of this subsection (20) acting in the capacity of agent, nominee except as otherwise specified in subsection (10) of this section, or trustee for another person.

COMMENTS: 1. 38-38-101(1)(b)(II) requires a holder foreclosing as a qualified holder to specify which paragraph of this subsection they are claiming applies. There is no such requirement for a holder releasing as a qualified holder under 38-39-102(3)(a). 2. Credit unions can be researched at http://researchcu.ncua.gov/Views/FindCreditUnions.aspx 3. Banks can be researched at http://www.occ.gov/topics/licensing/national-bank-lists/index-active-bank-lists.html. 4. HUD-approved mortgagees can be researched at http://www.hud.gov/ll/code/llslcrit.cfm. 5. http://www.coloradoattorneygeneral.gov/sites/default/files/uploads/UcccReport_11.pdf. has a list of state-supervised lenders. Be sure to review the attorney general’s list carefully because it includes lenders whose licenses have expired or been cancelled in addition to the approved lenders. Also, these lenders are only qualified holders under (d) if they are also public entities.

(21) "Records" means the records of the county clerk and recorder of the county where the property is located.(21.3) “Residential mortgage loan” means a loan that is primarily for personal, family, or household use and that is secured by a mortgage, deed of trust, or other equivalent, consensual security interest on a dwelling or residential real estate upon which is constructed or intended to be constructed a single-family dwelling or multiple-family dwelling of four or fewer units that is or will be used by the borrower as the borrower’s primary residence. 21.6) “Residential real estate” means any real property upon which a dwelling is or will be constructed.(22) "Sale" means a foreclosure sale conducted by an officer under this article.(23) "Secured indebtedness" means the amount owed pursuant to the evidence of debt without regard to the value of the collateral.(23.3) (a) “Servicer” or “mortgage servicer” means an entity that directly services a loan or that is responsible for interacting with the borrower; managing the loan account on a daily basis, including collecting and crediting periodic loan payments; managing any escrow

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account; or enforcing the note and security instrument, either as the current holder of the evidence of debt or as the current holder’s authorized agent.(b) “Servicer” includes an entity providing such services pursuant to designation as a subservicing agent or by contract with a master servicer.(c) “Servicer” does not mean a trustee, including the public trustee, or a trustee’s authorized agent acting under a power of sale pursuant to a deed of trust.(23.6) “Single point of contact” means an individual or team of personnel, each of whom has the ability and authority to perform the responsibilities described in section 38-38-103.1 on behalf of the servicer. The servicer shall ensure that each member of the team is knowledgeable about the borrower’s situation and current status.(24) "Statement of redemption" means the signed and acknowledged statement of the holder of the evidence of debt or the signed statement of the attorney for the holder as required by section 38-38-302 (3) or the signed and acknowledged statement of the lienor or the signed statement of the attorney for the lienor as required by section 38-38-302 (1) (f).

38-38-101. Holder of evidence of debt may elect to foreclose. (1) Documents required. Whenever a holder of an evidence of debt declares a violation of a covenant of a deed of trust and elects to publish all or a portion of the property therein described for sale, the holder or the attorney for the holder shall file the following with the public trustee of the county where the property is located:

COMMENT: When opening a new foreclosure packet, make sure everything listed in the attorney’s cover letter or list is enclosed. A check list of required documents is also a good idea. Always compare information on the NED with the original note and deed of trust.

(a) A notice of election and demand signed and acknowledged by the holder of the evidence of debt or signed by the attorney for the holder;

COMMENT: The contents of the NED are described in subsection (4).(b) The original evidence of debt, including any modifications to the original evidence of debt, together with the original indorsement or assignment thereof, if any, to the holder of the evidence of debt or other proper indorsement or assignment in accordance with subsection (6) of this section or, in lieu of the original evidence of debt, one of the following:(I) A corporate surety bond in the amount of one and one-half times the face amount of the original evidence of debt; or(II) A copy of the evidence of debt and a certification signed and properly acknowledged by a holder of an evidence of debt acting for itself or as agent, nominee, or trustee under subsection (2) of this section or a statement signed by the attorney for such holder, citing the paragraph of section 38-38-100.3 (20) under which the holder claims to be a qualified holder and certifying or stating that the copy of the evidence of debt is true and correct and that the use of the copy is subject to the conditions described in paragraph (a) of subsection (2) of this section; or(III) A certified copy of a monetary judgment entered by a court of competent jurisdiction.

COMMENTS: 1. If the filing does not include the original evidence of debt, the holder or attorney must provide either: A. A corporate surety bond valued at 1.5 times the face value of the evidence of debt with the amount taken from the deed of trust if there is not even a copy of the evidence of debt, B. Or, if the holder is a qualified holder, a copy of the evidence of debt and the statement described here specifying how the holder claims to be a qualified holder. The statement must be signed and acknowledged by the holder or signed by the holder’s attorney. 2. The law does not specify that the loan modifications must be originals so copies are allowed. However, assignments or indorsements may be certified copies under subsection (6). In all cases these modifications must be part of the original filing. If it is later discovered that a modification was not included in the filing, the foreclosure must be withdrawn. 3. The certified copy of a monetary judgment is allowed because the court retains the original. Note the use of the term “certified copy” in this provision is inconsistent with the definition of certified copy in 38-38-100.3(3). Obviously, the clerk and recorder of the county would not certify the court judgment. The PTAC attorney is of the opinion that this provision should be interpreted to require that the copy of the monetary judgment is certified by the clerk of the court in which the monetary judgment was entered. 4. Nothing in the statutes describes how the public trustee is required to handle the evidence of debt once it has been received and reviewed. It is a good idea to retain the note, and only return it to the holder upon written request and with retention of a copy. Get a receipt if the original is hand-delivered, or use certified mail with a return receipt. One reason to retain the original evidence of debt is so it can be cancelled after sale or marked with the deficiency after sale. PTAC counsel recommends that you have the original note at the time of sale, because the Uniform Commercial Codes indicates that possession of the negotiable instrument is required for enforcement (a provision overridden in the case of qualified holders). In the rare circumstance where concurrent foreclosures in different counties of deeds of trust secured by the same evidence of debt are taking place, those public trustees can transfer the evidence of debt between them as necessary to conduct the foreclosures under 38-37-111, but those public

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trustees should be certain to assure that one of them retains possession of the original evidence of debt (if one has been filed as part of the opening of the foreclosure) throughout the course of the foreclosure, unless and until the original evidence of debt with the notice of deficiency on it is to be returned to the foreclosing holder.

(c) The original recorded deed of trust securing the evidence of debt and any recorded modifications of the deed of trust or any recorded partial releases of the deed of trust, or in lieu thereof, one of the following:(I) Certified copies of the recorded deed of trust and any recorded modifications of the deed of trust or recorded partial releases of the deed of trust; or(II) Copies of the recorded deed of trust and any recorded modifications of the deed of trust or recorded partial releases of the deed of trust and a certification signed and properly acknowledged by a holder of an evidence of debt acting for itself or as an agent, nominee, or trustee under subsection (2) of this section or a signed statement by the attorney for such holder, citing the paragraph of section 38-38-100.3 (20) under which the holder claims to be a qualified holder and certifying or stating that the COPIES of the recorded deed of trust and any recorded modifications of the deed of trust or recorded partial releases of the deed of trust is true and correct and that the use of the copies is subject to the conditions described in paragraph (a) of subsection (2) of this section;

COMMENTS: 1. If the filing does not include the original recorded deed of trust and any original recorded modifications or partial releases, the holder or attorney must provide either: A. Certified copies obtained from the clerk and recorder of any non-original documents, B. Or, if the holder is a qualified holder, ordinary copies of the recorded documents and the statement described here specifying how the holder claims to be a qualified holder. The statement must be signed and acknowledged by the holder or signed by the holder’s attorney. 2. Whether originals or copies, the documents must show the clerk’s notations of recording. A stamp from an e-recording company with written digits is NOT a recorded document. 3. The recorded modifications and partial releases must be part of the original filing. If it is later discovered that a modification or partial release was not included in the filing, the foreclosure must be withdrawn. 4. The description of the property contained in the NED must be the legal description set forth in the initial foreclosure documents related to the deed of trust. The original legal description in a deed of trust may be modified by one or more of a modification agreement or amendment signed by the grantor and beneficiary, a partial release, a re-recording of the deed of trust re-signed by both grantor and beneficiary, or a scrivener’s error affidavit. An appropriate court order also would be sufficient. In the opinion of the PTAC attorney, a recorded subdivision plat affecting some or all of the property encumbered by the deed of trust signed by the grantor of the deed of trust and ratified by the holder of the evidence of debt secured by the deed of trust to be foreclosed is also sufficient to constitute amendment of the legal description of the property encumbered by the deed of trust. The public trustee is authorized to foreclose only upon the property described in the deed of trust. 5. Nothing in this section requires the public trustee to retain custody of the original Deed of Trust for the duration of the foreclosure.

(d) A combined notice pursuant to section 38-38-103; except that the combined notice may be omitted with the prior approval of the public trustee;

COMMENT: The combined notice may be omitted with the public trustee’s prior approval if the public trustee will supply the combined notice. The public trustee should have a written policy if the public trustee plans to omit this requirement.

(e) A mailing list; COMMENT: See 38-38-100.3(14) for parties to be listed in the mailing list. Note the public trustee is not liable or responsible for accuracy or completeness of the mailing list under 38-38-702(1)(c).

(f) Any affidavit recorded pursuant to section 38-35-109 (5) affecting the deed of trust described in paragraph (c) of this subsection (1), which affidavit shall be accepted by the public trustee as modifying the deed of trust for all purposes under this article 38 only if the affidavit is filed with the public trustee at the same time as the other documents required under this subsection (1);

COMMENT: The holder may submit at the opening of a foreclosure any recorded scrivener’s error affidavit affecting the deed of trust recorded pursuant to 38-35-109(5). These are to be accepted as modifying the deed of trust for the purposes of the foreclosure only if the affidavit is filed along with the other documents in the initial foreclosure opening submission. Whether the original is required is not specified. Because the scrivener’s error affidavit is the equivalent of a modification to the deed of trust as described in paragraph (c) above, the PTAC attorney recommends that you require an original or a certified copy unless you also have the certification of qualified holder.

(f.5) If there is a loan servicer of the evidence of debt described in the notice of election and demand and the loan servicer is not the holder, a statement executed by the holder of the evidence of debt of the attorney for such holder, identifying, to the best of such person’s knowledge, the name of the loan servicer;

COMMENT: If there is no loan servicer, or if the holder is loan servicer, no statement need be filed.(g) A statement executed by the holder of the evidence of debt, or the attorney for such holder, identifying, to the best knowledge of the person executing such statement, the name and address of the current owner of the property described in the notice of election and demand; and

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COMMENT: A statement by the holder or his attorney must be filed identifying to the best of the knowledge of the person executing the statement the name and address of the current owner of the property described in the NED. This statement cannot be relied upon for any purpose by the public trustee, and there is no penalty for error on this statement.

(h) (Repealed)(2) Foreclosure by qualified holder without original evidence of debt, original or certified copy of deed of trust, or proper indorsement. (a) A qualified holder, whether acting for itself or as agent, nominee, or trustee under section 38-38-100.3 (20) (j), that elects to foreclose without the original evidence of debt pursuant to subparagraph (II) of paragraph (b) of subsection (1) of this section, or without the original recorded deed of trust or a certified copy thereof pursuant to subparagraph (II) of paragraph (c) of subsection (1) of this section, or without the proper indorsement or assignment of an evidence of debt under paragraph (b) of subsection (1) of this section shall, by operation of law, be deemed to have agreed to indemnify and defend any person liable for repayment of any portion of the original evidence of debt in the event that the original evidence of debt is presented for payment to the extent of any amount, other than the amount of a deficiency remaining under the evidence of debt after deducting the amount bid at sale, and any person who sustains a loss due to any title defect that results from reliance upon a sale at which the original evidence of debt was not presented. The indemnity granted by this subsection (2) shall be limited to actual economic loss suffered together with any court costs and reasonable attorney fees and costs incurred in defending a claim brought as a direct and proximate cause of the failure to produce the original evidence of debt, but such indemnity shall not include, and no claimant shall be entitled to, any special, incidental, consequential, reliance, expectation, or punitive damages of any kind. A qualified holder acting as agent, nominee, or trustee shall be liable for the indemnity pursuant to this subsection (2).(b) In the event that a qualified holder or the attorney for the holder commences a foreclosure without production of the original evidence of debt, proper indorsement or assignment, or the original recorded deed of trust or a certified copy thereof, the qualified holder or the attorney for the holder may submit the original evidence of debt, proper indorsement or assignment, or the original recorded deed of trust or a certified copy thereof to the officer prior to the sale. In such event, the sale shall be conducted and administered as if the original evidence of debt, proper indorsement or assignment, or the original recorded deed of trust or a certified copy thereof had been submitted at the time of commencement of such proceeding, and any indemnities deemed to have been given by the qualified holder under paragraph (a) of this subsection (2) shall be null and void as to the instrument produced under this paragraph (b).(c) In the event that a foreclosure is conducted where the original evidence of debt, proper indorsement or assignment, or original recorded deed of trust or certified copy thereof has not been produced, the only claims shall be against the indemnitor as provided in paragraph (a) of this subsection (2) and not against the foreclosed property or the attorney for the holder of the evidence of debt. Nothing in this section shall preclude a person liable for repayment of the evidence of debt from pursuing remedies allowed by law.

COMMENT: This subsection describes the responsibilities of the party who claims to be a qualified holder.(3) Foreclosure on a portion of property. A holder of an evidence of debt may elect to foreclose a deed of trust under this article against a portion of the property encumbered by the deed of trust only if such portion is encumbered as a separate and distinct parcel or lot by the original or an amended deed of trust. Any foreclosure conducted by a public trustee against less than all of the property then encumbered by the deed of trust shall not affect the lien or the power of sale contained therein as to the remaining property. The amount bid at a sale of less than all of the property shall be deemed to have satisfied the secured indebtedness to the extent of the amount of the bid.

COMMENTS: 1. The NED will state whether or not the foreclosure is on all or a portion of the property. 2. The outstanding principal shown on the NED will reflect the full principal amount due on the note. The outstanding principal balance is not allocated per lot or parcel.

(4) Notice of election and demand. A notice of election and demand filed with the public trustee pursuant to this section shall contain the following:(a) The names of the original grantors of the deed of trust being foreclosed and the original beneficiaries or grantees thereof;(b) The name of the holder of the evidence of debt;(c) The date of the deed of trust being foreclosed;(d) The recording date, county, book, and page or reception number of the recording of the deed of trust being foreclosed;(e) The amount of the original principal balance of the secured indebtedness;(f) The amount of the outstanding principal balance of the secured indebtedness as of the date of the notice of election and demand;(g) A legal description of the property to be foreclosed as set forth in the documents to be provided to the public trustee pursuant to paragraph (c) of subsection (1) of this section;(h) A statement of whether the property described in the notice of election and demand is all or only a portion of the property then encumbered by the deed of trust being foreclosed;(i) A statement of the violation of the covenant of the evidence of debt or deed of trust being foreclosed upon which the foreclosure is based, which statement shall not constitute a waiver of any right accruing on account of any violation of any covenant of the evidence of debt or deed of trust other than the violation specified in the notice of election and demand; (j) The name, address, business telephone number, and bar registration number of the attorney for the holder of the evidence of debt, which may be indicated in the signature block of the notice of election and demand; and

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(k) A description of any changes to the deed of trust described in the notice of election and demand that are based on an affidavit filed with the public trustee under paragraph (f) of subsection (1) of this section, together with the recording date and reception number or book and page number of the recording of that affidavit in the records.

COMMENTS: 1. All of these items are required and must match the vital information on the evidence of debt or deed of trust. This is particularly true of the legal description. The NED does not need to include information from the deed of trust such as the marital status of the grantors, tenancy in which they hold title, or the state of incorporation of the beneficiary. If a trust or corporation is the grantor, then the NED must list the trust or corporation, not the individual signatory, as the party in foreclosure. However, if the grantor of the deed of trust is “John Smith as Trustee of the Smith Family Trust,” then grantor should be named in the same fashion in the NED.2. The NED must contain a description of any changes to the deed of trust described in the NED that are based on a scrivener’s error affidavit plus the recording date and reception number or book and page number of that affidavit. 3. In the opinion of PTAC legal counsel, an error in an NED may not be corrected by a scrivener’s error affidavit by the public trustee because an NED is not prepared by the public trustee. See 38-38-705(2). 4. There is no requirement for there to be a property address in the NED. If one is included as a courtesy, it must match what is in the deed of trust or evidence of debt. 5. Be alert for unusual statements of the violation or default. The notices sent and published under 38-38-103 should match this language, and a non-monetary default does not have a right to cure under 38-38-104.

(5) Error in notice. In the event that the amount of the outstanding principal balance due and owing upon the secured indebtedness is erroneously set forth in the notice of election and demand or the combined notice, the error shall not affect the validity of the notice of election and demand, the combined notice, the publication, the sale, the certificate of purchase described in section 38-38-401, the certificate of redemption described in section 38-38-402, the confirmation deed as defined in section 38-38-100.3 (5), or any other document executed in connection therewith.

COMMENTS: 1. We do not need to account for the outstanding principal balance if it differs from the outstanding principal balance stated in the bid. 2. An outstanding principal balance higher than the original may indicate a missing loan modification, but there may be other acceptable reasons why this is the case.

(6) Indorsement or assignment. (a) Proper indorsement or assignment of an evidence of debt shall include the original indorsement or assignment or a certified copy of an indorsement or assignment recorded in the county where the property being foreclosed is located.(b) Notwithstanding the provisions of paragraph (a) of this subsection (6), the original evidence of debt or a copy thereof without proper indorsement or assignment shall be deemed to be properly indorsed or assigned if a qualified holder presents the original evidence of debt or a copy thereof to the officer together with a statement in the certification of the qualified holder or in the statement of the attorney for the qualified holder pursuant to subparagraph (II) of paragraph (b) of subsection (1) of this section that the party on whose behalf the foreclosure was commenced is the holder of the evidence of debt.

COMMENT: Proper indorsement or assignment of the evidence of debt includes originals or certified copies, however, it is unusual for the evidence of debt to be recorded. A certificate from a qualified holder will also suffice. Subsection (6)(a) clarifies that the proper indorsement or assignment of an evidence of debt includes the original or a certified copy of a recorded indorsement (highly unlikely) or assignment of evidence of debt. The qualified holder continues to be able to utilize certification in lieu of proper indorsement or assignment under subsection (6)(b).

(7) Multiple instruments. If the evidence of debt consists of multiple instruments, such as notes or bonds, the holder of the evidence of debt may elect to foreclose with respect to fewer than all of such instruments or documents by identifying in the notice of election and demand and the combined notice only those to be satisfied in whole or in part, in which case the requirements of this section shall apply only as to those instruments or documents.

COMMENT: This is rare. More often, you get all the evidences of debt.(8) Assignment or transfer of debt during foreclosure. (a) The holder of the evidence of debt may assign or transfer the secured indebtedness at any time during the pendency of a foreclosure action without affecting the validity of the secured indebtedness. Upon receipt of written notice signed by the holder who commenced the foreclosure action or the attorney for the holder stating that the evidence of debt has been assigned and transferred and identifying the assignee or transferee, the public trustee shall complete the foreclosure as directed by the assignee or transferee or the attorney for the assignee or transferee. No holder of an evidence of debt, certificate of purchase, or certificate of redemption shall be liable to any third party for the acts or omissions of any assignee or transferee that occur after the date of the assignment or transfer.(b) The assignment or transfer of the secured indebtedness during the pendency of a foreclosure shall be deemed made without recourse unless otherwise agreed in a written statement signed by the assignor or transferor. The holder of the evidence of debt, certificate of purchase, or certificate of redemption making the assignment or transfer and the attorney for the holder shall have no duty, obligation, or liability to the assignee or transferee or to any third party for any act or omission with respect to the foreclosure or the loan servicing of the secured indebtedness after the assignment or transfer. If an assignment or transfer is made by a qualified holder that commenced the foreclosure pursuant to subsection (2) of this section, the qualified holder's indemnity under said subsection (2) shall remain in effect with

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respect to all parties except to the assignee or transferee, unless otherwise agreed in a writing signed by the assignee or transferee if the assignee or transferee is a qualified holder.(c) If an assignment or transfer is made to a holder of an evidence of debt other than a qualified holder, the holder must file with the officer the original evidence of debt and the original recorded deed of trust or, in lieu thereof, the documents required in paragraphs (b) and (c) of subsection (1) of this section. An assignee or transferee shall be presumed to not be a qualified holder, and as such, shall be subject to the provisions of this paragraph (c), unless a signed statement by the attorney for such assignee or transferee that cites the paragraph of section 38-38-100.3 (20) under which the assignee or transferee claims to be a qualified holder is filed with the officer.

COMMENT: Upon assignment or transfer of evidence of debt during foreclosure from any holder to other than a qualified holder, the new holder must file with the public trustee original evidence of debt and deed of trust or alternatives under paragraphs (1)(b) and (1)(c).The assignee is assumed to NOT be a qualified holder, however a signed statement of the attorney for the assignee citing the paragraph of 38-38-100.3(20) that qualifies the assignee as a qualified holder will be acceptable. In that case, no new certificate of qualified holder is required.

(9) Partial release from deed of trust. At any time after the recording of the notice of election and demand but prior to the sale, a portion of the property may be released from the deed of trust being foreclosed pursuant to section 38-39-102 or as otherwise provided by order of a court of competent jurisdiction recorded in the county where the property being released is located. Upon recording of the release or court order, the holder of the evidence of debt or the attorney for the holder shall pay the fee described in section 38-37-104 (1) (b) (IX), amend the combined notice, and, in the case of a public trustee foreclosure, amend the notice of election and demand to describe the property that continues to be secured by the deed of trust or other lien being foreclosed as of the effective date of the release or court order; except that the amended combined notice may be omitted with the prior approval of the public trustee. The public trustee shall record the amended notice of election and demand upon receipt. Upon receipt of the amended combined notice, if provided by the holder of the attorney for the holder, the public trustee shall republish and mail the amended combined notice in the manner set forth in section 38-38-109 (1) (b). If the amended combined notice was omitted pursuant to this subsection (9), upon recordation of the amended notice of election and demand, the public trustee shall supply an amended combined notice and shall then republish and mail the amended combined notice in the manner set forth in section 38-38-109(1)(b).

COMMENTS: 1. In order to affect an open foreclosure, a partial release must be recorded after the NED is recorded but prior to the sale. If the partial is ordered by a court, the court order must be recorded. 2. A partial release under this section is one which is recorded after the NED and prior to sale, not a partial release recorded prior to the recording of the NED. If the partial release occurred prior to the NED being recorded but was not excluded from the legal description in the NED of the property to be foreclosed, the foreclosure must be withdrawn. 3. The law does not describe how one “amends” the NED. Although it could be done by taking the recorded NED and modifying it to exclude the released property (with reference to the release) having the signor initial the change, and then re-recording it, the preferred procedure would be for the holder’s attorney to submit a clean document called an “Amended Notice of Election and Demand” that cites the original NED recording information. 4. The fee is $100. 5. To meet the deadlines it is best to continue the sale at least 65 days after the amended NED is received as in paragraph 38-38-103(2)(a). Do not extend the sale date beyond the limit in 38-38-109. You will publish the amended notice five times and mail it to the most recent amended mailing list or if none, the original mailing list.

(10) Deposit. (a) The public trustee may require the holder or servicer to make a deposit of up to five hundred dollars plus the amount of the fee permitted pursuant to section 38-37-104 (1) (b) (I), at the time the notice of election and demand is filed, to be applied against the fees and costs of the public trustee. (b)The public trustee may allow the attorney for the holder or servicer of the holder or servicer, if not represented by an attorney, to establish with the public trustee one or more accounts, from which the public trustee may pay the fees and costs of the public trustee in any foreclosure filed by the holder or the attorney for the holder, and through which the public trustee may transmit refunds or cures, overbids, or redemption proceeds.

38-38-102. Recording notice of election and demand - record of sale. (1) No later than ten business days following the receipt of the notice of election and demand, the public trustee shall review the documents filed pursuant to section 38-38-101 (1) and, if the filing is complete, cause the notice to be recorded in the office of the county clerk and recorder of the county where the property described in the notice is located.(2) The public trustee shall retain in the public trustee's records a printed or electronic copy of the notice of election and demand and the combined notice, as published pursuant to section 38-38-103. Such records shall be available for inspection by the public at the public trustee's offices during the public trustee's normal business hours.

COMMENTS: 1. Do not record the NED until all documents have been reviewed and you have determined that the filing is complete. The NED must be recorded within ten (10) business days after receiving the file if documents are correct and complete. If incomplete or incorrect reject and return to the attorney.

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2. Do not wait on the agricultural classification decision before recording the NED.

38-38-102.5. Notice prior to residential foreclosure – hotline.(1) As used in this section, “holder” means the holder of an evidence of debt constituting a residential mortgage loan, as defined in section 12-61-902, C.R.S., of that holder’s loan servicer or other person acting on the holder’s behalf. “Holder” shall not include a person whose only activity as a holder is as the seller in not more than three credit sales or loans per year.(2) At least thirty days before filing a notice of election and demand and at least thirty days after default, the holder shall mail a notice addressed to the original grantor of the deed of trust at the address in the recorded deed of trust or other lien being foreclosed and, if different, at the last address shown in the holder’s records, containing (a) The telephone number of the Colorado Foreclosure Hotline; and (b) The direct telephone number of the holder’s loss mitigation representative or department; AND (c) A statement that, under section 6-1-1107, C.R.S., it is illegal for any person acting as a foreclosure consultant to charge an up-front fee or deposit to the borrower for services related to the foreclosure. (3) (a) This section shall apply only to a default consisting solely of the failure of the original grantor of the deed of trust to make one or more required payments. (b) With respect to defaults on the same obligation, after the holder has once given the original grantor of the deed of trust a notice as specified in subsection (2) of this section, this section imposes no limitation on the holder’s right to foreclose with respect to any subsequent default that occurs within twelve months after such notice.

COMMENTS: This section creates no obligation for the public trustee, and the public trustee receives no evidence regarding the accomplishment of these requirements by the holder.

38-38-103. Combined notice - publication - providing information. (1) (a) No more than twenty calendar days after the recording of the notice of election and demand, the public trustee shall mail a combined notice as described in subsection (4) of this section to the persons set forth in the mailing list.

COMMENTS: 1. Failure to meet statutory time requirements found in this section are addressed in 38-37-110 and 38-38-705. 2. Correctly processing the mailing and publishing of the combined notice may be the most critical part of the foreclosure process. 3. This is the first of at least two mailings that are sent to parties identified to the public trustee by the holder of the evidence of debt, usually an attorney representing the lender. 4. The deadline for this mailing looks back to the recording of the NED. The qualifier here is calendar days. Additionally, the deadline looks back to receipt of the affidavit of posting on files eligible for deferment. 5. This mailing shall include a copy of the statutes listed in 38-38-103(4)(b). 6. Mailing shall be delayed and sale continued if the affidavit of posting (38-38-103(5)(d)) has not been received for files eligible for deferment (Article 38, Title 38, Part 8). Continuing the sale may necessitate rescheduling publications. 7. The public trustee should keep a copy of the mailing list. The list is included with any subsequent list(s) when recording the COP upon sale (38-38-401(1)(h)(i)). 8. The public trustee should complete a certification of mailing to document the date of the mailing, the person responsible for the mailing, and the list used. Many attorneys include a certification document with their submission. You may choose to generate your own document. 9. There is no statutory requirement for the handling of returned mail. It is recommended that some physical or electronic record of returned mail be retained for a period of 7 years.

(b) No more than sixty calendar days nor less than forty-five calendar days prior to the first scheduled date of sale, the public trustee shall mail a combined notice as described in subsection (4) of this section to the persons as set forth in the most recent amended mailing list. If there is no amended mailing list, the public trustee shall mail a combined notice as described in subsection (4) of this section to the persons as set forth in the mailing list.

COMMENTS: 1. The deadline for subsequent mailings after the initial mailing looks forward to the date of sale. The qualifier here is calendar days. 2. If the attorney does not submit an amended mailing list before the deadline for the second mailing, you should use the original mailing list. 3. Sending the second mailing during the latter part of the permissible period allows maximum time for receipt of an amended mailing list. This could avoid the time and expense of a third mailing because of a delayed amended

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mailing list. Amended mailing lists received after the second mailing require continuance of the sale under paragraph (2)(a). 4. Infrequently, additional amended mailing lists may be provided.

(c) If a recorded instrument does not specify the address of the party purporting to have an interest in the property under such recorded instrument, the party shall not be entitled to notice and any interest in the property under such instrument shall be extinguished upon the execution and delivery of a deed pursuant to section 38-38-501.

COMMENTS: 1. Parties with right to notice may have a claim to set aside a foreclosure if they were not properly noticed. The public trustee is not responsible for the accuracy or completeness of the mailing lists submitted to the public trustee under 38-38-702(1)(c). A party still has the right to cure or redeem even though not listed in the mailing list if that party otherwise meets the requirement of the applicable statute (38-38-104 for cures and 38-38-302 for redemptions). 2. The party’s interest in the property shall be extinguished when title vests according to 38-38-501.

(2) The holder of the evidence of debt or the attorney for the holder shall deliver an amended mailing list to the officer as needed. If an amended mailing list is received after the officer has sent the mailing described in paragraph (b) of subsection (1) of this section, the officer shall continue the sale to no less than sixty-five calendar days after receipt of the amended mailing list. The officer shall send the notice pursuant to subsection (4) of this section to the persons on the amended mailing list no less than forty-five calendar days prior to the actual date of sale.

COMMENTS: 1. It is the attorney’s responsibility to provide an amended mailing list if additional parties are discovered. 2. The qualifier is the date the list is received by the public trustee. 3. The qualifier of calendar days is used to set the new sale date. 4. The sale continuance applies anytime you have already sent the second mailing. 5. Upon receipt of a late amended mailing list, it is good practice for you to process the mailing as soon as possible. This will prevent additional delay of sale. 6. You do not republish the notice based on a “late” amended mailing list.

(3) The sheriff shall mail a combined notice as described in subsection (4) of this section to the persons named at the addresses indicated in the mailing list no less than sixteen nor more than thirty calendar days after the holder of the evidence of debt or the attorney for the holder delivers to the sheriff the mailing list and the original or a copy of a decree of foreclosure or a writ of execution directing the sheriff to sell property.(4) (a) The combined notices required to be mailed pursuant to subsections (1), (2), and (3) of this section must contain the following:(I) The information required by section 38-38-101 (4);(II) The statement: A notice of intent to cure filed pursuant to section 38-38-104 shall be filed with the officer at least fifteen calendar days prior to the first scheduled sale date or any date to which the sale is continued;(II.5) The statement, which must be in bold: If the sale date is continued to a later date, the deadline to file a notice of intent to cure by those parties entitled to cure may also be extended;(III) The statement: A notice of intent to redeem filed pursuant to section 38-38-302 shall be filed with the officer no later than eight business days after the sale;(IV) The date to which the sale has been continued pursuant to paragraph (a) of subsection (2) of this section; (V) The date of sale determined pursuant to section 38-38-108;(VI) The place of sale determined pursuant to section 38-38-110; (VII) If the sale is conducted by means or the internet or another electronic medium pursuant to 38-38-110 (1):(A) The electronic address;(B) The location of computer workstations that are available to the public and information about how to obtain instructions on accessing the sale and submitting bids; and (C) A statement that the bidding rules for the sale will be posted on the internet or other electronic medium used to conduct the sale at least two weeks before the date of sale;(VIII) The statement as required by section 24-70-109, C.R.S.: The lien being foreclosed may not be a first lien; and(IX) A statement that, if the borrower believes that a lender or servicer has violated the requirements for a single point of contact in section 38-38-103.1 or the prohibition on dual tracking in section 38-38-103.2, the borrower may file a complaint with the Colorado attorney general, the CFPB, or both, but the filing of a complaint will not stop the foreclosure process. The notice must include contact information for both the Colorado attorney general’s office and the CFPB. If the officer maintains a web site, the officer shall also post this information on the web site for viewing by all borrowers.(b) A legible copy of this section and sections 38-37-108, 38-38-104, 38-38-301, 38-38-302, 38-38-304, 38-38-305, and 38-38-306 shall be sent with all notices pursuant to this section.

COMMENTS: 1. The following checklist contains brief descriptions of items from 38-38-101(4) that are required to appear on the combined notice used for mailings with the above criteria. The combined notice used for publications is addressed in paragraph (5)(a).A. Names of the original grantors of the deed of trust and the original beneficiaries or grantees;

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B. The holder of the evidence of debt; C. Date of the deed of trust; D. Recording date, county, book, and page or reception number of the recording of deed of trust; E. Amount of the original principal balance; F. Amount of the outstanding principal balance as of the date of the NED; G. Legal description of the property; H. A statement of whether the property described in the NED is all or only a portion of the property;I. A statement of the violation of the covenant of the evidence of debt or deed of trust; J. Name, address, business telephone number, and bar registration number of the attorney for the holder of the evidence of debt; and K. A description of any changes to the deed of trust based on a scrivener’s error affidavit plus the recording date and book and page or reception number of its recording. L. The following information must be included only for electronic sales. (1) The electronic address referenced in (4)(a)(VII)(A) presumably references the address where the sale will be conducted. (2) Although the location of public computer workstations is required information under (4)(a)(VII)(B), no statute requires that the public trustee provides them. However, if the specified computers are not available for the bidding, the validity of the sale is likely to be compromised, so the public trustee should be certain that the computer workstations identified in the combined notice will be available for the sale. If the use of the computers of one or more public institutions, (e.g. the local library) is cited, it would be good practice to coordinate with those entities to provide instructions and training. It is also good practice for the public trustee to have step-by-step instructions for accessing the sale available in the office and by email in addition to stating them in the combined notice as required under (4)(a)VII)(B). (3) The Act does not include requirements concerning the number of computers that must be available and the time period(s) during which they must be available. The only thing that can be said with certainty is that more than one computer must be available based on the reference to computer workstations in the plural. Given this critical omission, PTAC legal counsel recommends that any public trustee utilizing electronic sales procedures create written policies under 38-38-106(7)(a) concerning the number and availability of computers, plus bidding rules as described in (4)(a)(VII)(B) and bid increments as described in 38-38-106(1)(a). These policies should be consistently applied in all electronically conducted foreclosure sales. 2. It is generally accepted that 9 point font meets the standard of legibility. The principle is to give property owners ready access to statutes that govern the legal process affecting ownership of their land. It is reasonable to expect information to be in a font large enough for the majority of the public to read. 3. Although paragraph (5)(b) addresses the responsibility of the public trustee to review the publication of the combined notice for accuracy, it is a good practice to review the combined notice used for mailings. Correcting errors before mailing can save time and money for the public trustee, property owner, attorney, and lender. Documents should be printed and then each unique item proofed for accuracy. Any time the combined notice requirements or software processing templates are changed, the public trustee should proof them. 4. It is generally best to provide your own copy of the statutes, since you are otherwise relying on the attorney for the holder to have sent a correct copy.

(5) (a) No more than sixty calendar days nor less than forty-five calendar days prior to the first scheduled date of sale, unless a longer period of publication is specified in the deed of trust or other lien being foreclosed, a deed of trust or other lien being foreclosed is deemed to require the officer to commence publication of the combined notice, omitting both the statements under subsections (4)(a)(II), (4)(a)(III), and (4)(a)(IX) of this section and the copies of the statutes under subsection (4)(b) of this section and adding the first and last publication dates if not already specified in the combined notice, for four weeks, which means publication once each week for five consecutive weeks.(b) The officer shall review the publication of the combined notice for accuracy.(c) The fees and costs to be allowed for publication of the combined notice shall be as provided by law for the publication of legal notices or advertising.

COMMENTS: 1. According to PTAC legal counsel, if any publication contains an error, all publications must be republished because paragraph (5)(a) requires that the first and last publication dates must be included in the published notice. Therefore, if any of the five publications is in error, any additional publication will change the last publication date, rendering all previous publications erroneous. 2. According to PTAC legal counsel, if an error occurs in publication, any such republication will necessarily extend the sale date beyond the originally scheduled initial sale date to a date outside the initial sale date range specified under 38-38-108(1)(a) or (c). In accordance with 38-38-109(1)(b), at the request of the holder of the evidence of debt or the attorney for the holder or on the public trustee’s own initiative, the public trustee shall continue the then-scheduled date of sale to a future date no later than thirty calendar days after the fifth publication of the corrected combined notice or republished combined notice. This authorizes the public trustee to continue the initially scheduled

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sale. The new sale date after five publications of the corrected combined notice will be a continued sale date, rather than the initial sale date. Therefore the new sale date being outside the time periods allowed under 38-38-108(1)(a) or (c) is not problematic. PTAC legal counsel suggests the proper procedure is to a) set a new calendar date that is within 30 days after the projected date for the fifth publication date, b) specify that date of sale in the corrected publications of the combined notice, and c) at the time and place of the initially scheduled sale specified in the erroneous publication(s), continue the sale to the date specified in the corrected publications under 38-38-109(1)(a). 3. Keep in mind that changing the sale date may necessitate changing publication dates and an update of the combined noticed used for publication. 4. Generally, newspapers send proofs to the public trustee. It is your responsibility to proof them for accuracy. You must also check that they appear in the newspaper. Sometimes a newspaper will omit one week. The law specifically states five consecutive weekly publications. 5. If the publications appear in a daily newspaper, the publications must run consecutively on the same day of each week. 6. A common practice is to send the publication files to the newspaper when opening the foreclosure. In this case, publications may need to be cancelled when the sale date changes and the combined notices may need to be reproduced and submitted. 7. The fees and costs of publication are added to the cost of the foreclosure. 8. The newspaper must provide a notarized affidavit of advertisement attesting to the fact of publication. Copies of this document may be requested by attorneys.

38-38-103.1. Single point of contact - servicer to designate - duties - exemption.(1) No later than the forty-fifth day of a borrower’s delinquency, a servicer shall promptly establish a single point of contact for communications with the borrower. The servicer shall do so within the time periods prescribed in, and subject to the other requirements imposed by, federal law and CFPB rules and orders. Once the single point of contact is established, the servicer shall promptly provide to the borrower, in writing, one or more direct means of communication with the single point of contact. (2) A single point of contact shall:(a) Provide the borrower with accurate information about:(I) Loss mitigation options available to the borrower from the owner or assignee of the borrower’s mortgage loan;(II) Actions the borrower must take to be evaluated for loss mitigation options, including actions the borrower must take to submit a complete loss mitigation application and, if applicable, actions the borrower must take to appeal the servicer’s determination to deny a borrower’s loss mitigation application for any trial or permanent loan modification program offered by the servicer; (III) The status of any loss mitigation application that the borrower has submitted to the servicer;(IV) The circumstances under which the servicer may make a referral to foreclosure; and(V) Applicable loss mitigation deadlines established by an owner or assignee of the borrower’s mortgage loan or by section 38-38-103.2;(b) Retrieve, in a timely manner:(I) A complete record of the borrower’s payment history; and(II) All written information the borrower has provided to the servicer and, if available, to prior servicers in connection with a loss mitigation application;(c) Provide the documents and information identified in paragraph (b) of this subsection (2) to other persons required to evaluate a borrower for loss mitigation options made available by the servicer, if applicable; and(d) Provide a delinquent borrower with information about the procedures for submitting a notice of error or an information request.(3) A servicer is exempt from this section if the servicer services five thousand or fewer mortgage loans for all of which the servicer, or an affiliate of the servicer, is the creditor or assignee. In determining whether a servicer services five thousand or fewer mortgages, the servicer is evaluated based on the number of mortgage loans serviced by the servicer and any affiliates as of January 1 for the remainder of the calendar year. A servicer that crosses the threshold has six months after crossing the threshold or until the next January 1, whichever is later, to comply with this section.(4) A servicer who complies with 12 CFR 1024.40, as promulgated by the CFPB, or is exempt from compliance with that regulation under federal law or CFPB rules, regulations, or orders, is deemed in compliance with this section.

COMMENTS: 1. No later than the forty-fifth day of a borrower's delinquency, a servicer shall promptly establish a single point of contact for communications with the borrower. The servicer shall do so within the time periods prescribed in, and subject to the other requirements imposed by, federal law and CFPB rules and orders. Once the single point of contact is established, the servicer shall promptly provide to the borrower, in writing, one or more direct means of communication with the single point of contact. 2. A single point of contact shall: A. Provide the borrower with accurate information about: (I) Loss mitigation options available to the borrower from the owner or assignee of the borrower's mortgage loan;

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(II) Actions the borrower must take to be evaluated for loss mitigation options, including actions the borrower must take to submit a complete loss mitigation application and, if applicable, actions the borrower must take to appeal the servicer's determination to deny a borrower's loss mitigation application for any trial or permanent loan modification program offered by the servicer; (III) The status of any loss mitigation application that the borrower has submitted to the servicer;(IV) The circumstances under which the servicer may make a referral to foreclosure; and (V) Applicable loss mitigation deadlines established by an owner or assignee of the borrower's mortgage loan or by section 38-38-103.2; B. Retrieve, in a timely manner: (I) A complete record of the borrower's payment history; and (II) All written information the borrower has provided to the servicer and, if available, to prior servicers in connection with a loss mitigation application; C Provide the documents and information identified in paragraph (b) of this subsection (2) to other persons required to evaluate a borrower for loss mitigation options made available by the servicer, if applicable; and D. Provide a delinquent borrower with information about the procedures for submitting a notice of error or an information request. 3. A servicer is exempt from this section if the servicer services five thousand or fewer mortgage loans for all of which the servicer, or an affiliate of the servicer, is the creditor or assignee. In determining whether a servicer services five thousand or fewer mortgages, the servicer is evaluated based on the number of mortgage loans serviced by the servicer and any affiliates as of January 1 for the remainder of the calendar year. A servicer that crosses the threshold has six months after crossing the threshold or until the next January 1, whichever is later, to comply with this section. 4. A servicer who complies with 12 CFR 1024.40, as promulgated by the CFPB, or is exempt from compliance with that regulation under federal law or CFPB rules, regulations, or orders, is deemed in compliance with this section.

38-38-103.2. Dual tracking prohibited - notice to officer - continuation of sale pending inquiry.(1) A servicer is subject to the time limits and other requirements of federal law and CFPB rules in connection with a foreclosure under this article.(2) The servicer shall:(a) Notify the borrower in writing when it receives a complete loss mitigation application from the borrower; and (b) Exercise reasonable diligence in obtaining documents and information to complete a loss mitigation application.(3) If the borrower has received confirmation from the servicer that the borrower has submitted a complete loss mitigation application or has been offered and has accepted a loss mitigation option and is complying with its provisions, and yet a notice of election and demand pursuant to section 38-38-101 has been filed or action is being taken pursuant to section 38-38-105 or 38-38-106 with regard to the borrower, then, in order to stop the foreclosure sale, no later than fourteen calendar days before the sale date, the borrower must present to the officer the borrower’s written notification from the servicer indicating receipt of a complete loss mitigation application dated at least thirty-seven days prior to the sale date or acceptance of a loss mitigation option, and, if the borrower does so:(a) As soon as possible, but no later than three business days after receipt of the notification, the officer shall contact the attorney for the servicer or holder or the servicer or holder, if not represented by an attorney, by telephone, electronic mail, or first-class mail and inquire as to the status of the loss mitigation option. The officer shall document this inquiry. Until the servicer or its attorney responds to the inquiry, the officer shall continue the sale in accordance with section 38-38-109 (1) (a).(b) If the attorney for the servicer or holder or the servicer or holder, if not represented by an attorney, fails to respond within seven calendar days to an inquiry under paragraph (a) of this subsection (3), then, as soon as possible but no later than the fourteenth day after the date of the inquiry, the officer shall send a certified letter to the attorney for the servicer or holder or to the servicer or holder, if not represented by an attorney, as listed on the notice of election and demand, inquiring as to the status of the loss mitigation option. The servicer or holder shall reimburse the officer for the cost of mailing the letter.(c) If, after being contacted in accordance with paragraph (a) or (b) of this subsection (3), the attorney for the servicer or holder or the servicer or holder, if not represented by an attorney, gives the officer a written statement via electronic mail or first-class mail disputing that a loss mitigation option has been offered and accepted or that the borrower is complying with its terms, the officer shall proceed with the sale.(d) (I) If the attorney for the servicer or holder or the servicer or holder, if not represented by an attorney, acknowledges that a loss mitigation option has been offered and accepted and that the borrower is complying with its terms the officer shall continue the sale in accordance with section 38-38-109 (1) (a), and the holder shall withdraw the notice of election and demand within one hundred eighty calendar days after the date of the acknowledgment if the borrower continues to comply with the terms of the loss mitigation option.(II) If, within one hundred eighty calendar days after the date of the acknowledgment, the attorney for the servicer or holder or the servicer or holder, if not represented by an attorney, has not withdrawn the notice of election and demand and neither the attorney for the servicer or holder nor the servicer or holder, if not represented by an attorney, has notified the officer that the borrower is not complying with the terms of the loss mitigation option, the officer may administratively withdraw the notice of election and demand.

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(III) If, within one hundred eighty calendar days after the date of the acknowledgment, the borrower fails to comply with the terms of the loss mitigation option, the holder or the attorney for the holder may give written notice to the officer that the loss mitigation option has been breached, and, no later than ten business days after receiving the notice, the officer shall mail an amended combined notice containing the date of the rescheduled sale to each person appearing on the most recent mailing list, or on an updated mailing list if provided by the holder or the holder’s attorney. The rescheduled sale date must not be fewer than seven calendar days after the date the amended combined notice is mailed. All fees and costs of providing the amended combined notice may be included as part of the foreclosure costs.(4) If a foreclosure sale is continued as a result of compliance with the requirements of subsection (3) of this section, the periods for which the sale may be continued are in addition to the twelve-month period of continuance provided by section 38-38-109(1).(5) A servicer is exempt from this section if the servicer services five thousand or fewer mortgage loans for all of which the servicer, or an affiliate of the servicer, is the creditor or assignee. In determining whether a servicer services five thousand or fewer mortgages, the servicer is evaluated based on the number of mortgage loans serviced by the servicer and any affiliates as of January 1 for the remainder of the calendar year. A servicer that crosses the threshold has six months after crossing the threshold or until the next January 1, whichever is later, to comply with this section.(6) A servicer who complies with 12 CFR 1024.41, as promulgated by the CFPB, or is exempt from compliance with that regulation under federal law or CFPB rules, regulations, or orders, is deemed in compliance with this section.

COMMENTS: (1) A servicer is subject to the time limits and other requirements of federal law and CFPB rules in connection with a foreclosure under this article. (2) The servicer shall: (a) Notify the borrower in writing when it receives a complete loss mitigation application from the borrower; and (b) Exercise reasonable diligence in obtaining documents and information to complete a loss mitigation application. (3) If the borrower has received confirmation from the servicer that the borrower has submitted a complete loss mitigation application or has been offered and has accepted a loss mitigation option and is complying with its provisions, and yet a notice of election and demand pursuant to section 38-38-101 has been filed or action is being taken pursuant to section 38-38-105 or 38-38-106 with regard to the borrower, then, in order to stop the foreclosure sale, no later than fourteen calendar days before the sale date, the borrower must present to the officer the borrower's written notification from the servicer indicating receipt of a complete loss mitigation application dated at least thirty-seven days prior to the sale date or acceptance of a loss mitigation option, and, if the borrower does so: (a) As soon as possible, but no later than three business days after receipt of the notification, the officer shall contact the attorney for the servicer or holder or the servicer or holder, if not represented by an attorney, by telephone, electronic mail, or first-class mail and inquire as to the status of the loss mitigation option. The officer shall document this inquiry. Until the servicer or its attorney responds to the inquiry, the officer shall continue the sale in accordance with section 38-38-109 (1) (a). (b) If the attorney for the servicer or holder or the servicer or holder, if not represented by an attorney, fails to respond within seven calendar days to an inquiry under paragraph (a) of this subsection (3), then, as soon as possible but no later than the fourteenth day after the date of the inquiry, the officer shall send a certified letter to the attorney for the servicer or holder or to the servicer or holder, if not represented by an attorney, as listed on the notice of election and demand, inquiring as to the status of the loss mitigation option. The servicer or holder shall reimburse the officer for the cost of mailing the letter. (c) If, after being contacted in accordance with paragraph (a) or (b) of this subsection (3), the attorney for the servicer or holder or the servicer or holder, if not represented by an attorney, gives the officer a written statement via electronic mail or first-class mail disputing that a loss mitigation option has been offered and accepted or that the borrower is complying with its terms, the officer shall proceed with the sale.(d) (I) If the attorney for the servicer or holder or the servicer or holder, if not represented by an attorney, acknowledges that a loss mitigation option has been offered and accepted and that the borrower is complying with its terms, the officer shall continue the sale in accordance with section 38-38-109 (1) (a), and the holder shall withdraw the notice of election and demand within one hundred eighty calendar days after the date of the acknowledgment if the borrower continues to comply with the terms of the loss mitigation option.(II) If, within one hundred eighty calendar days after the date of the acknowledgment, the attorney for the servicer or holder or the servicer or holder, if not represented by an attorney, has not withdrawn the notice of election and demand and neither the attorney for the servicer or holder nor the servicer or holder, if not represented by an attorney, has notified the officer that the borrower is not complying with the terms of the loss mitigation option, the officer may administratively withdraw the notice of election and demand. (III) If, within one hundred eighty calendar days after the date of the acknowledgment, the borrower fails to comply with the terms of the loss mitigation option, the holder or the attorney for the holder may give written notice to the officer that the loss mitigation option has been breached, and, no later than ten business days after receiving the notice, the officer shall mail an amended combined notice containing the date of the rescheduled sale to each person appearing on the most recent mailing list, or on an updated mailing list if provided by the holder or the holder's attorney. The rescheduled sale date must not be fewer than seven calendar days after the date the amended

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combined notice is mailed. All fees and costs of providing the amended combined notice may be included as part of the foreclosure costs. Comments: 1. The sale date referred to in subsection (3) is the current scheduled sale date. 2. Based on Comment 1 above, it is possible that a notification under subsection (3) could be untimely when received, but become timely if the sale date is continued. If the borrower (defined in 38-38-100.3(2.5)) submits written notification under subsection (3) fewer than 14 days before the sale date, or if the borrower submits at least 14 days before the sale date written notification from the servicer that a complete loss mitigation application has been received less than the 37 days before the sale date, PTAC recommends that you notify the borrower and the holder’s attorney in writing that the notification submitted to you does not presently trigger the process under subsection (3), but that the process under subsection (3) will be triggered if the sale date is continued such that the notification was submitted to you at least 14 days before the date to which the sale has been continued and, if it concerns a complete loss mitigation application, that the application was received by the servicer at least 37 days before the date to which the sale has been continued. Then, if the sale date is continued such that a notification under subsection (3) that was untimely when submitted to you later becomes timely, the deadline under paragraph (3)(a) becomes 3 business days after the sale is continued to a date making the notification submitted to you under subsection (3) timely. 3. If the attorney for the lender/servicer disputes the borrowers assertion in writing per subsection (3)(c) and the foreclosure is therefore proceeding to sale, the borrower should be notified of this as soon as possible. (4) If a foreclosure sale is continued as a result of compliance with the requirements of subsection (3) of this section, the periods for which the sale may be continued are in addition to the twelve-month period of continuance provided by section 38-38-109 (1). (5) A servicer is exempt from this section if the servicer services five thousand or fewer mortgage loans for all of which the servicer, or an affiliate of the servicer, is the creditor or assignee. In determining whether a servicer services five thousand or fewer mortgages, the servicer is evaluated based on the number of mortgage loans serviced by the servicer and any affiliates as of January 1 for the remainder of the calendar year. A servicer that crosses the threshold has six months after crossing the threshold or until the next January 1, whichever is later, to comply with this section. (6) A servicer who complies with 12 CFR 1024.41, as promulgated by the CFPB, or is exempt from compliance with that regulation under federal law or CFPB rules, regulations, or orders, is deemed in compliance with this section.

38-38-104. Right to cure when default is nonpayment - right to cure for certain technical defaults. (1) Unless the order authorizing the sale described in section 38-38-105 contains a determination that there is a reasonable probability that a default in the terms of the evidence of debt, deed of trust, or other lien being foreclosed other than nonpayment of sums due thereunder has occurred, any of the following persons is entitled to cure the default if the person files with the officer, no later than fifteen calendar days prior to the date of sale, a written notice of intent to cure together with evidence of the person's right to cure to the satisfaction of the officer:

COMMENTS: 1. The 15 calendar day deadline prior to the date of sale is a moving target, based on the actual date of sale rather than the initial date of sale. In the rare cases when the 15th calendar day before sale is a non-business day, the deadline rolls ahead to the next business day. 2. The law is silent with respect to how to handle late intents to cure. Because public policy favors cure, PTAC recommends that you accept the intent, pass the intent to the holder or holder’s attorney as described in subparagraph (2)(a)(I), but advise all parties concerned in writing that the late intent does not trigger a right to cure, or a requirement for a cure statement, at that time. However, if the sale is continued for any reason (for example week to week continuance under 38-38-109(1)(a) because no bid is received from the holder or holder’s attorney) to a date at least 15 days after the notice of intent to cure was filed, the requirements of subparagraph (2)(a)(I) would then be triggered.. Acceptance of the late intent also prevents a situation in which the borrower does not have a chance to file a timely intent to cure even though the sale date is continued such that the filed notice would have been timely. If the sale date is continued, then the deadline date for the intent to cure moves along with it, so an intent to cure that was late at the time it was filed may become timely after-the-fact. If this happens, you should notify the holder’s attorney that the right to cure has been triggered, and a cure statement is required – see subsection (7). 3. Evidence of the person’s right to cure applies to the name listed on the written intent. There is no requirement that the person in whose name the intent to cure is filed deliver the intent personally. There is also no requirement for a signature on the intent to cure, or for any specific format to be used, though most counties have a standard form they offer, as attached below. 4. It is very unusual for a foreclosure to be filed for reasons OTHER than non-payment, but it does happen. , One example is transfer of title to an unauthorized party (sometimes referred to as a due on sale violation). The NED (38-38-101(4)(i)) is supposed to indicate the type of default, and this information will in turn be put on the combined

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notices. Thus, the officer needs to be alert to non-standard default reasons and make sure the standard reason does not erroneously end up on the notice. By a strict reading of this language, however, the right to cure remains present until the OAS is issued that determines the type of default. That would mean that the sale would be continued for failure to provide a cure statement until the OAS was received. The language implies that the right to cure is vacated even if non-payment is an additional cause of default; this is a reasonable interpretation since payment of the monetary portion of the default would not cure the rest of the default. 5. Note that failure to maintain insurance, pay real estate taxes, and any other violation which can be cured by the payment of money constitute nonpayment defaults which are curable. 6. With respect to violation based on failure to provide financial information, which is covered by subsection (3), the language of section 104 is inconsistent. 104(1) says there is a cure right, unless the order authorizing sale contains a determination of the reasonable probability of a default “other than nonpayment of sums due.” However, subsection 104(3) specifically provides that the right of cure exists where the violation consists of failure to provide financial information. This potential problem should be addressed by the Rule 120 court not entering the noncurable determination where the violation is based on failure to provide financial information. If the only violation is failure to provide financial information and the court still issues the determination of the existence of a default other than nonpayment, PTAC legal counsel is of the opinion that you should act in accordance with the court order, unless it is amended, which you could request if you are or become a party to the proceeding. 7. If violations consisting of both nonpayment and a noncurable payment such as a due-on-sale violation exists, there is no right to cure. 8. The right to cure may not be waived or shortened by the borrower prior to the default occurring. See 38-38-703. 9. It is a good idea to have an example of an intent to cure form on your website and to also send it to the borrower and owner with the mailings.

(a) (I) The owner of the property as of the date and time of the recording of the notice of election and demand or lis pendens as evidenced in the records;(II) If the owner of the property is dead or incapacitated on or after the date and time of the recording of the notice of election and demand or lis pendens, the owner's heirs, personal representative, legal guardian, or conservator as of the time of filing of the notice of intent to cure, whether or not such person's interest is shown in the records, or any co-owner of the property if the co-owner's ownership interest is evidenced in the records as of the date and time of the recording of the notice of election and demand or lis pendens;(III) A transferee of the property as evidenced in the records as of the time of filing of the notice of intent to cure if the transferee was the property owner's spouse as of the date and time of the recording of the notice of election and demand or lis pendens or if the transferee is wholly owned or controlled by the property owner, is wholly owned or controlled by the controlling owner of the property owner, or is the controlling owner of the property owner;(IV) A transferee or owner of the property by virtue of merger or other similar event or by operation of law occurring after the date and time of the recording of the notice of election and demand or lis pendens; or(V) The holder of an order or judgment entered by a court of competent jurisdiction as evidenced in the records after the date and time of the recording of the notice of election and demand or lis pendens ordering title to the property to be vested in a person other than the owner;

COMMENTS: 1. In other words, the owner at the time the NED was recorded has the right to cure, as do certain later owners. While the foreclosure filing includes a statement about current ownership, it is best to verify the information with the county Assessor, who should have dates for all transfers of ownership, but if you do so be certain to confirm whether the assessor’s records are sufficiently current for this purpose. The right to cure must be proven to your satisfaction, so this is a question of fact for you to determine. In some circumstances confirmation of title from a title company might be appropriate. The other categories cover just about everything other than a voluntary transfer to a completely different owner after the NED was recorded. If there is any doubt about the right to cure, it is best to accept the intent and let the holder or holder’s attorney provide an argument that rejects that right. 2. For foreclosures in which no NED has been recorded since 1/1/10, there are additional limits that apply to (V): the court order must result from “a divorce, property settlement, quiet title action, or similar proceeding.”

(b) A person liable under the evidence of debt;COMMENT: This is not always the same as the grantor on the deed of trust, so verify on the evidence of debt and any guaranties.

(c) A surety or guarantor of the evidence of debt; orCOMMENT: Verify on the evidence of debt and any guarantee agreement submitted with the foreclosure or notice of intent to cure.

(d) A holder of an interest junior to the lien being foreclosed by virtue of being a lienor or lessee of, or a holder of an easement or license on, the property or a contract vendee of the property, if the instrument evidencing the interest was recorded in the records prior to the date and time of the recording of the notice of election and demand or lis pendens. If, prior to the date and time of the recording of the notice of election and demand or lis pendens, a lien is recorded in an incorrect county, the holder’s rights under this section shall only be valid if the lien is rerecorded in the correct county at least fifteen calendar days prior to the actual date of sale.

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COMMENT: Essentially, anyone who would have a right to redeem also has a right to cure. The second sentence describes the solution for the very rare lien holder whose lien was recorded in the wrong county. As long as the lien was recorded somewhere before the NED was recorded, the lien just needs to be re-recorded before the intent to cure deadline passes.

(2) (a) (I) Promptly upon receipt of a notice of intent to cure by the officer, but no less than twelve calendar days prior to the date of sale, the officer shall transmit by mail, facsimile, or electronic means to the person executing the notice of election and demand a request for a statement of all sums necessary to cure the default. The attorney for the holder or servicer or, if none, the holder or servicer, shall file the cure statement with the officer, and the cure statement must set forth the amounts necessary to cure. Upon receipt of the statement of the amounts needed to cure, the officer shall transmit in writing to the person filing the notice of intent to cure the default:(A) The cure statement; and (B) A statement that the person filing the notice of intent to cure is entitled to receive from the attorney for the holder or servicer or, if not represented, from the holder or servicer, upon written request mailed to the attorney for the holder, or servicer or, if not represented, to the holder of servicer at the address stated on the cure statement, copies of receipts or other credible evidence to support the costs claimed on the cure statement. This request may be sent only after payment to the officer of the amount shown on the cure statement and must be sent within ninety days after payment of the cure amount.

COMMENTS: 1. The cure statement should be requested as soon as is reasonably possible after it is received. There is no reason to wait until calendar day 12 before sale, even if the intent is received on day 15 before sale. The larger law firms tend to have central mailboxes for this kind of request so it does not get overlooked by an individual who may be out. 2. A cover letter or statement from the PT to the person filing the intent to cure is required as it must contain the explanation required in 38-38-104 (2)(a)(I)(B) regarding the right to certain receipts along with the cure statement. 3. In order to get the cure statement and any cover letter from the PT to the person filing the intent to cure, you need to be sure to collect the best mailing and email addresses from that person. Do not assume the statement should go to the property address. 4. Concerning the effect of a cure statement filed fewer than 15 days prior to the then scheduled sale date when the sale is continued for any reason to a date at least 15 days after the notice of intent to cure was filed, see comment 2 to subsection (1) and comment 2 to subsection (7). If the sale is continued to a date that causes the previously late filed notice of intent to become timely, and if the PT has not already requested a cure statement as suggested in comment 2 to subsection(1), then the PT should send the request for the cure statement promptly after the sale is continued to that date. In this case, if the sale is being continued from week to week this may require further continuance of the sale date by the PT if the cure statement is not received at least 8 days prior to the actual sale date.

(II) If a cure statement is required pursuant to subparagraph (I) of this paragraph (a), the holder of the evidence of debt shall submit a signed and acknowledged cure statement, or the office of the attorney for the holder shall submit a signed cure statement, specifying the following amounts, itemized in substantially the following categories and in substantially the following form:

CURE STATEMENTTo: ________Public Trustee (or Sheriff) of the County (or City and County) of _________. State of Colorado (hereinafter the “officer”)Foreclosure Sale Number: __________Grantor: __________The date through which the cure statement is effective: __________The following is an itemization of all sums necessary to cure the default (any amount that is based on a good faith estimate is indicated with an asterisk):Payments under the evidence of debt ______________payments of $ __________eachAccrued late charges __________Other amounts due under the evidence of debt (specify)______________ __________________________________ ____________________Property inspections __________Property, general liability, and casualty insurance __________Certificate of taxes due __________Property taxes paid by the holder __________Owner association assessment paid the by holder__________Permitted amounts paid on prior liens __________Less impound/escrow account credit __________Plus impound/escrow account deficiency __________Title costs __________Rule 120 docket fee __________

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Rule 120 posting costs __________Court costs __________Postage/delivery costs __________Service/posting costs __________Attorney fees __________Other fee and costs (specify):______________ __________________________________ ____________________Reinstatement Total $__________ (does not include officer’s fees and costs)Officer’s fees and costs $__________ (to be added by officer)Total to cure $__________ (to be added by officer)

It may take several days before the cure is processed and entered into the holder’s records.The total to cure does not include any future monthly mortgage payments that may be due.

Name of the holder of the evidence of debt and the attorney for the holder:Holder: __________Attorney: __________Printed Name: __________Signature: __________Attorney address: __________Attorney business telephone: __________

COMMENTS: 1. This form was defined in the law that took effect on 9/1/12. It can be used, but is not required, for older foreclosures. 2. “Substantially the following form” means that the parentheticals can be omitted, lines with a $0 entry can be omitted, the order could be re-arranged. It does not mean that the statement can be condensed into a few lines, or that the statements just above the attorney’s signature block may be omitted. 3. A particularly important part of the statement is the line for the number of missed payments, and amount. This helps the borrower know whether or not upcoming payments are included. 4. The statement needs to be signed by an attorney (or signed and acknowledged by the holder). 5. Be VERY SURE to add the PT fees and costs to the statement (and any cover letter) before sending it out. Include in this amount any costs already incurred or possibly to be incurred before the expiration of the cure statement. It would be poor policy to add PT costs after the statement is sent to the borrower. On the other hand, if publications will not begin until after the statement expires, then it would also be poor public policy to demand the borrower pay for them up front, even though the amount would later be refunded because it needlessly increases the amount that must be paid to cure. 6. 6. The cure statement must be for a fixed amount, not variable. It is also not acceptable for a cure statement to demand that the public trustee re-verify the amount with the holder prior to accepting the cure payment.

(III) The cure statement is a representation of fact, made upon the current information and belief of the person signing it. If the holder of servicer determines that there is an inaccurate amount contained in the cure statement, the holder or servicer, or the attorney for the holder or servicer, shall inform the officer immediately and provide a cure statement with updated figures; except that any additional or increased amounts must be added at least ten calendar days before the effective date of the original cure statement. If an inaccurate amount is reported and a corrected cure statement is not provided within the time specified in this subparagraph (III), the officer may continue the sale for one week in accordance with section 38-38-109(1). An estimate as allowed under subsection (5) of this section is not an inaccurate amount for purposes of this subparagraph (III).

COMMENT: Paragraph (III) requires amendment of a cure statement if the holder or servicer determines there is an inaccurate amount on the statement, but if an amount is increased or added it must be done “at least ten calendar days before the effective date of the original cure statement” or the sale may be continued one week. In the opinion of legal counsel for PTAC, this should be read as “at least ten days before the LAST effective date of the original cure statement because, under 38-38-104(5), a cure statement is effective from the date is received by your office. Continuation should be considered if the effective date is approaching the scheduled sale date in order to assure the borrower has sufficient time to cure before the deadline. [NOTE: I suggest you recommend continuance in all cases as a best practice so the borrower always gets the extra week if the amended cure statement is late.]

(IV) Within seven business days after the officer’s notification to the holder or servicer, or to the attorney for the holder or servicer, that the officer has received the funds necessary to cure the default as reflected on the initial or updated cure statement, the holder or servicer

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or the attorney for the holder or servicer shall deliver to the officer a final statement, reconciled for estimated amounts that were not or would not be incurred as of the date the cure proceeds were received by the officer, along with receipts or invoices for all rule 120 docket costs and all statutorily mandated posting costs claimed on the cure statement. All amounts of cure proceeds received by the officer in excess of the amounts reflected on the final statement shall be remitted by the officer to the person who paid the cure amount.(V)(A) The holder or servicer shall remit to the person who paid the cure amount any portion of the cure amount that represents a fee or cost listed on the cure statement that exceeds the amount actually incurred and that was not remitted by the officer in accordance with subparagraph (I) of paragraph (d) of this subsection (2).(B) The officer shall remit to the person who paid the cure amount any portion of the cure amount that represents a fee or cost of the officer that exceeds the amount actually incurred by the officer.(VI) The holder or servicer is responsible for retaining receipts or other credible evidence to support all costs claimed on the cure statement, including rule 120 docket fees and posting costs, and the person who paid the cure amount is entitled to receive copies upon written request mailed to the attorney for the holder or servicer or, if not represented, to the holder or servicer at the address stated on the cure statement. The request may be made at any time after payment to the officer of the amount shown on the cure statement, but must be made within ninety days after payment of the cure amount. The attorney for the holder or servicer or, if not represented, the holder or servicer shall provide copies of all receipts or other credible evidence within thirty days after receiving the request, and may provide the copies electronically.(b) No later than 12 noon on the day before the sale, the person desiring to cure the default shall pay to the officer all sums that are due and owing under the evidence of debt and deed of trust or other lien being foreclosed and all fees and costs of the holder of the evidence of debt allowable under the evidence of debt, deed of trust, or other lien being foreclosed through the effective date set forth in the cure statement; except that any principal that would not have been due in the absence of acceleration shall not be included in such sums due.

COMMENTS: 1. Cure payment must be in the form described in 38-37-108. NO money orders or personal checks are permitted. 2. The cure deadline is a floating deadline based on the actual sale date. PTAC takes the position that if a cure payment is tendered after noon on the day before sale and the cure statement is valid through that date, the public policy favoring cures would be good cause to continue the sale one week so the payment can be accepted. It is courteous to ask the attorney for the holder to continue the sale, but the officer may do so without permission under 38-38-109(1)(a). 3. It is not the responsibility of the officer to ensure that the amounts listed on the cure statement are proper – see 38-38-702(1)(a).

(c) If a cure is made, interest for the period of any continuance pursuant to section 38-38-109 (1) (c) shall be allowed only at the regular rate and not at the default rate as may be specified in the evidence of debt, deed of trust, or other lien being foreclosed. If a cure is not made, interest at the default rate, if specified in the evidence of debt, deed of trust, or other lien being foreclosed, for the period of the continuance shall be allowed.

COMMENT: The essence of this provision is that holder is penalized by being required to accept interest at the regular rate if a cure statement is not timely filed with the public trustee and a cure subsequently occurs, but no such penalty is required if a cure does not take place and the holder in that case is still entitled to receive interest at the default rate for the period of continuance based on failure to timely file a cure statement. It is not the responsibility of the officer to ensure that the amounts listed on the cure statement are proper – see 38-38-702(1)(a).

(d) (I) Upon receipt of the cure amount and conditioned upon the withdrawal or dismissal of the foreclosure from the holder or servicer or the attorney for the holder or servicer, the officer shall:(A) Deliver the cure amount, less the fees and costs of the officer and any adjustments required under subparagraph (III) of paragraph (a) of this subsection (2), to the attorney for the holder or servicer or, if none, to the holder or servicer; and (B) Obtain and retain, in the officer’s records, the name and mailing address of the person who paid the cure amount.(II) Following the withdrawal or dismissal, the evidence of debt shall be returned uncancelled to the attorney for the holder OR servicer or, if none, to the holder or servicer by the public trustee or to the court by the sheriff.

COMMENTS: 1. Do not forward the cure amount to the holder’s attorney until after the withdrawal paperwork has been received and accepted. 2. The PTAC attorney advises waiting until at least the 4th business day, and sometimes longer, after the deposit of certified funds before treating them as cleared and sending the proceeds to the holder’s attorney. See Comments under 38-37-108. 3. Write the proceeds check payable to the holder and send it certified mail to the attorney. If you write the check payable to the attorney, this will delay the holder’s receipt of the funds and runs the risk that the attorney forgets to forward the proceeds. Sending the check directly to the holder risks having the holder not understand what the check is and misapplying it. Certified mail assures that the check can be tracked to the law firm. 4. The noncancelled original evidence of debt should also be sent via certified mail, so it is not lost. 5. Once the cure payment is received, the file should not be taken to sale unless the funds fail to clear, even if the holder is refusing to withdraw the file. Failure to withdraw after cure is good cause to continue the sale under 38-38-109(1)(a). 6. In the opinion of PTAC legal counsel, based on the language of 38-38-104(2)(d)(I)(A),if the attorney fails to file a final cure statement after the cure payment has been made under 38-38-104(2)(b)(IV), you should proceed to make

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the payment to the attorney based on the earlier cure statement but withhold the portion which requires the submission of receipts;,i.e., the Rule 120 fees and costs and the posting costs regarding deferment eligibility. 7. Along with sending the proceeds, there may be a refund due to the person who cured (usually resulting from cancelled publications or an overpayment). There also may be a balance due back to the attorney from the initial deposit.

(3) Where the default in the terms of the evidence of debt, deed of trust, or other lien on which the holder of the evidence of debt claims the right to foreclose is the failure of a party to furnish balance sheets or tax returns, any person entitled to cure pursuant to paragraph (a) of subsection (2) of this section may cure such default in the manner prescribed in this section by providing to the holder or the attorney for the holder the required balance sheets, tax returns, or other adequate evidence of the party's financial condition so long as all sums currently due under the evidence of debt have been paid and all amounts due under paragraph (b) of subsection (2) of this section, where applicable, have been paid.

COMMENT: It appears that this method of cure does not involve the public trustee, as it is not clear what cure statement would be provided, and the documents are to be provided to the holder or its attorney. It also would be very difficult for the public trustee to determine that the offered balance sheets or tax returns are sufficient to cure the default.

(4) Any person liable on the debt and the grantor of the deed of trust or other lien being foreclosed shall be deemed to have given the necessary consent to allow the holder of the evidence of debt or the attorney for the holder to provide the information specified in paragraph (a) of subsection (2) of this section to the officer and all other persons who may assert a right to cure pursuant to this section.

COMMENT: Providing the cure amount to a lien holder or current owner entitled to cure does not require the consent of the person actually liable for the debt.

(5) A cure statement pursuant to paragraph (a) of subsection (2) of this section shall state the period for which it is effective. The cure statement shall be effective for at least ten calendar days after the date the cure statement is received by the officer or until the last day to cure under paragraph (b) of subsection (2) of this section, whichever occurs first. The cure statement shall be effective for no more than thirty calendar days after the date the cure statement is received by the officer or until the last day to cure under paragraph (b) of subsection (2) of this section, whichever occurs first. The use of good faith estimates in the cure statement with respect to interest and fees and costs is specifically authorized by this article, so long as the cure statement states that it is a good faith estimate effective through the last day to cure as indicated in the cure statement. The use of a good faith estimate in the cure statement shall not change or extend the period or effective date of a cure statement.

COMMENTS: 1. Cure statements must be valid for the required number of full calendar days. They do not expire at noon or at any other time of day. 2. Cure statements should not expire on a non-business day. If you receive a cure statement that expires on a non-business day, you may accept it as long as the previous business day is at least 10 days after receipt of the notice (the shortening of the cure payment period that results is a good reason not to have a sale on the day after a holiday) and as long as you very clearly indicate on the statement and any cover letter that the actual payment would have to be received by that prior business day. 3. The language in this section was changed for NEDs recorded after 9/1/12. For older foreclosures, the deadlines ran from the date on the statement rather than the date the statement was received. The law was changed because cure statements were sometimes back-dated by several days, reducing the borrower’s time to cure by several days.

(6) Following expiration of the period for which the cure statement is effective, but no less than fifteen calendar days prior to the date of sale, the person who originally submitted the notice of intent to cure may make a written request to the public trustee for an update of the amount necessary to cure. Upon receipt by the public trustee of such written request for updated cure figures, subsection (2) of this section shall apply.

COMMENT: When a cure statement expires, the PT does not automatically request a new one. A written request for update from the borrower must be received. This request need not be as formal as the original intent to cure, and could even be an email from the borrower to the PT.

(7) If the holder of the evidence of debt or the attorney for the holder receives a request for a cure statement under paragraph (a) of subsection (2) of this section and does not file a cure statement with the officer by the earlier of ten business days after receipt of the request or the eighth calendar day before the date of the sale, the officer shall continue the sale for one week. Thereafter and until the cure statement is filed, the officer shall continue the sale an additional week for each week that the holder fails to file the cure statement; except that the sale shall not by continued beyond the period of continuance allowed under 38-38-109 (1) (a). A cure statement must be received by 12 noon on the day it is due in order to meet a deadline set forth in this subsection (7).

COMMENTS: 1. The deadline for receipt of the cure statement varies depending on when the intent to cure was filed. The attorney has 10 business days to provide the statement, unless that 10th business day would be less than 8 calendar days before the sale. 2. There is no deadline for a cure statement if the intent was filed late (less than 15 calendar days before the current sale date). If the sale is continued to a date more than 15 days after the date the notice of intent to cure was filed, however, that late intent would become timely. That will in turn trigger application of the deadline described in this section. See comment 2 to subsection(1) and comment 2 to subparagraph (2)(a)I).

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3. Under the law that took effect for NEDs recorded after 9/1/12, the deadline for statements is noon on the due date. For earlier foreclosures, there is no time-of-day deadline, and cure statements would sometimes arrive 5 minutes before close of business or even after close of business. The law change ensures that we can process a cure statement and send it to the borrower on that same day. It also allows the continuance to be processed on the same day. 4. Continue the sale for one week if the cure statement is received after noon on the due date and one additional week if it is not received by noon each week on the same day of the week after the statement was originally due. It is courteous to notify the attorney that you are continuing the sale, but the law does not require you to do at all. 5. Although you will get to the same result if you wait until the statement is received and then continue the sale all at once according to how late it was, this is not how the law directs continuances to be done. Continuing as you go may also come to the attorney’s attention in case the cure statement request has been forgotten. 6. Occasionally an attorney will claim that the statement deadline should not apply because no one at the firm noticed the request. It is best to treat the request as received by the attorney on the date that you sent the request. Even though it is not required, this is a good reason to remind the attorney once about a late statement – possibly, the firm was not paying attention. 7. Do not continue the sale date if a bankruptcy stay is in effect. All that is required is announcement of the stay of the sale on the date sale is scheduled when the bankruptcy is filed. See 38-38-109(2)(a) and (b)(1). Some attorneys interpret federal law as prohibiting them from providing a cure statement during the bankruptcy stay. Resume the deadline when the stay is lifted. 8. Continue the sale for a late cure statement even if you are continuing it also for a late affidavit of deferment posting. 9. The continuance is from the current sale date. If the attorney for the holder initiates a continuance while the cure statement is late, honor it and continue for an additional week for the missed deadline. 10. Do not continue the sale past the one-year period allowed under 38-38-109. If this provision would require you to do so, tell the holder that the file must be withdrawn. 11. For NEDs recorded before 1/1/10, the latest deadline for the cure statement is noon on the 7th calendar day before sale rather than the 8th day.

38-38-105. Court order authorizing sale mandatory - repeal. (1) (Repealed).(2) (a) On and after January 1, 2008, whenever a public trustee forecloses upon a deed of trust under this article, the holder of the evidence of debt or the attorney for the holder shall obtain an order authorizing sale from a court of competent jurisdiction to issue the same pursuant to rule 120 or other rule of the Colorado rules of civil procedure. The order shall recite the date the hearing was scheduled if no hearing was held, or the date the hearing was completed if a hearing was held, which date in either case must be no later than the day prior to the last day on which an effective notice of intent to cure may be filed with the public trustee under section 38-38-104. A sale held without an order authorizing sale issued in compliance with this paragraph (a) shall be invalid.

COMMENTS: 1. See 38-38-401 and Legal Opinion: Required Elements of OAS. 2. The Order Authorizing Sale (OAS) shall be submitted by 12:00 noon on the second business day prior to sale. The Order must recite a hearing was scheduled if no hearing was held, or the hearing was completed if a hearing was held, at least 16 days prior to the actual date of sale. 3. The OAS must contain the following: A. civil action number; B. date of the order; C. the date the hearing was scheduled if no hearing was held, or the date the hearing was completed if a hearing was held; D. language in or on the order or a court added attachment to it stating that the order was granted or that the PT is authorized to go to sale; E. recording information of the DOT consisting of at least either the book and page or reception number; F. legal description of the property authorized to be sold; G. PT sale number [in all but circumstances where this is not possible such as described above, and the PT can confirm that the OAS is referencing the current default on which the foreclosure is based]; See 38-38-401 and Legal Opinion: Required Elements of OAS. H. all attachments to the order. 4. If the OAS is incomplete, you should reject the OAS. We cannot accept an incomplete and deficient OAS and take the property to sale based on such an OAS because the sale would be invalid. 5. The OAS may be issued under Rule 120 or any other rule of the Colorado Rules of Civil Procedure. Sometimes you will receive an OAS that has been filed in a county other than the county in which the property is located. Rule

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120 provides that any proceeding under that rule involving a consumer obligation must be brought and heard in the county in which the consumer signed the obligation or in which the property is located. A consumer obligation is any obligation where the obligor is a natural person, and the obligation is incurred primarily for personal, family or household purposes. In addition, if in any Rule 120 proceeding the response or any other writing filed with the court requests a change of venue to the county in which the property is located, the court is required to transfer the proceeding to that county. If you believe venue for the Rule 120 proceeding is improper, you should enter an appearance in the proceeding through counsel for that purpose rather than merely ignoring the order. If you choose to ignore the order based on your belief that venue was improper, the result may be a separate action seeking an order in mandamus compelling you to go to sale, so appearance in the Rule 120 proceeding will likely be the preferable choice. 6. If a bankruptcy is filed after the OAS is granted, the OAS remains in effect. There is no need for a new OAS once the bankruptcy stay is lifted.

(b) The public trustee shall postpone the sale, unless the holder or the attorney for the holder causes a copy of the order to be provided to the public trustee no later than 12 noon on the second business day prior to the date of sale. A sale held in violation of this paragraph (b) shall not be invalid if an order that complied with the provisions of paragraph (a) of this subsection (2) was entered.

COMMENT: If the public trustee took a property to sale and later found the OAS had not been received or was not timely received, the sale still would be valid so long as the order was entered and complied with (2)(a).

(3) (a) Not less than fourteen days before the date set for the hearing pursuant to rule 120 or other rule of the Colorado rules of civil procedure, the holder or the attorney for the holder seeking an order authorizing sale under this section for a residential property shall cause a notice of hearing as described in rule 120 (b) of the Colorado rules of civil procedure to be posted in a conspicuous place on the property that is the subject of the sale. If possible, the notice shall be posted on the front door of the residence, but if access to the door is not possible or is restricted, the notice shall be posted at an alternative conspicuous location, such as a gate or similar impediment. If a person at the residence is impeding posting at the residence at the time of the attempted posting, the notice may be handed to that person to satisfy this posting requirement. The notice required by this subsection (3) is sufficient if it complies with the requirements of this section without regard to any requirements for service of process in a civil action required by court rule.(b) For servicers who are not exempt pursuant to section 38-38-103.1 (3) or 38-38-103.2 (4), the notice must contain or be accompanied by a conspicuous statement, substantially as follows, together with contact information for both the Colorado attorney general’s office and the CFPB: If you believe that the lender or servicer of this mortgage has violated the requirements for a single point of contact in section 38-38-103.1, Colorado revised statutes, or the prohibition on dual tracking in section 38-38-103.2, Colorado revised statutes, you may file a complaint with the Colorado attorney general, the federal consumer financial protection bureau, or both, at [insert contact information for both]. The filing of a complaint will not stop the foreclosure process.(4) As used in this section, “residential property” means any real property upon which a dwelling, as defined in section 5-1-301(18), C.R.S., is constructed and occupied.

38-38-106. Bid required - form of bid. (1) (a) The holder of the evidence of debt or the attorney for the holder shall submit a bid setting forth the holder’s initial bid for the property that is received by the officer no later than 12 noon on the second business day prior to the date of sale as provided in this section. In addition, if the sale will be conducted electronically, the holder may also include a maximum bid for the property. The holder or the attorney for the holder need not personally attend the sale. If the sale will be conducted electronically and the holder has elected to include a maximum bid, the bid shall be increased electronically in increments incorporated in the electronic program used by the officer to conduct the electronic sale up to such maximum bid if one or more third parties submit competing bids for the property.

COMMENTS: 1. PTAC legal counsel had the following comment – “This provision, although less than clear, appears to permit the holder to include (or presumably delete) a maximum bid in any bid(s) submitted before noon of the day before the sale. Because the holder’s bid can also be amended during an electronic sale under subsection (5) below, and a bid for an electronic sale containing a maximum bid was not excluded from this right to amend during the sale, reading these two provisions together appears to mean that the holder can add or delete a maximum bid even during the sale. Only if the last bid by the holder contains a maximum bid would the mandatory bid increases under (1)(a) appear to be applicable. This may create substantial problems in the conduct of an electronic sale if the software used to conduct the sale does not allow for bidding in this fashion, so a public trustee should be careful to confirm that the software utilized will accommodate the statutorily mandated procedure.” 2. Most electronic auctions operate on a proxy system. This allows bidders, including lenders, to set an amount for the most they are willing to pay for the property. The auction software will award the sale to the highest bidder but will only charge the amount needed to win the sale. 3. For example, the public trustee requires bids to be made in $1 increments and the initial bid is $100,000. Bidder A enters a maximum bid of $120,000. Bidder B enters a maximum bid of $150,000. Bidder B will win the auction for

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$120,001. In the case of a tie, the auction vendor should have a random selection process within the software to award the bid.

(b) If the bid is not received by the officer by the deadline, the officer shall continue the sale for one week and shall announce or post a notice of the continuance at the time and place designated for the sale.(2) The holder of the evidence of debt shall submit a signed and acknowledged bid, or the attorney for the holder shall submit a signed bid, which must specify the following amounts, itemized in substantially the following categories and in substantially the following form:BIDTo: Public Trustee (or Sheriff) of the County (or City and County) of , State of Colorado (hereinafter the "officer").Date: , whose mailing address is , bids the sum of $ in your Sale No. to be held on the day of , 20 .The following is an itemization of all amounts due the holder of the evidence of debt secured by the deed of trust or other lien being foreclosed.Street address of property being foreclosed, if known:_________________Regular [ ] / Default [ ] rate of interest as of the date of sale: __________(Inapplicable items may be omitted):Amounts due under the evidence of debt: Principal $ __________ Interest __________ Late charges __________ Allowable prepayment penalties or premiums __________ Other amounts due under the evidence of debt (specify) __________ Category subtotal: _________Other fees and costs advanced by the holder of evidence of debt: Property, general liability, and casualty insurance __________ Property inspections __________ Appraisals __________ Taxes and assessments __________ Utility charges owed or incurred __________ Owner association assessment paid __________ Permitted amounts paid on prior liens __________ Permitted lease payments __________ Less impound/escrow account credit __________ Plus impound/escrow account deficiency __________ Other (describe) __________ Category subtotal: $ __________ Attorney fees and advances: Attorney fees __________ Title commitments and insurances or abstractor charges __________ Court docketing __________ Statutory notice __________ Postage __________ Electronic transmissions __________ Photocopies __________ Telephone __________ Other (describe) __________ Category subtotal: $ __________ Officer fees and costs: Officer statutory fee __________ Publication charges __________ Certificate of purchase recording fee _________ Confirmation deed fee ____________ Confirmation deed recording fee ___________ Other (describe) __________ Category subtotal: $ __________ Total due holder of the evidence of debt __________ Initial Bid $ __________ Deficiency $ __________I enclose herewith the following:1. Order authorizing sale.2. Check (if applicable) to your order in the sum of $_____ covering the balance of your fees and costs.

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3. Other: ________________________ .Please send us the following: 1. Promissory Note with THE deficiency, IF ANY, noted thereon 2. Refund for overpayment of officer's fees and costs, if any 3. Other: .Name of the holder of the evidence of debtand the attorney for the holderHolder:_________________Attorney:______________By: ______________________Attorney Registration Number:________Attorney Address: __________________________Attorney Business Telephone: ______________

COMMENTS: 1. The public trustee should provide to the holder or the holder’s attorney a balance sheet with a breakdown of all public trustee fees and costs incurred prior to sale to be included in the bid: A. Costs for recording the NED, the COP, and the confirmation deed; B. The sum of all amounts paid to third parties in connection with processing a foreclosure, including but not limited to publications, electronic filings, and electronic recordings; C. The public trustee fee for opening and administering a foreclosure on a deed of trust that is less than $480,000.00 is $150.00 and where such amount exceeds $480,000.00, a fee of one thirty-second of 1% of either the original principal amount or the outstanding principal amount, whichever is less; D. All costs incurred for postage and copies; E. When applicable, public trustee fees and costs as provided by statute 38-37-104(VII), (VIII), (IX), (X), (XI), and (XII); F. Actual costs, not exceeding $25.00, for providing information to the homeowner and public per 38-38-704. 2. It is strongly recommended that all fees and costs incurred during the foreclosure process are collected prior to taking the property to sale. It would be acceptable for the public trustee to reject the bid and continue the sale week to week until all fees and costs have been received. If this were to happen, then a new bid would have to be timely submitted for the next scheduled sale date after receiving the balance of all costs and fees.

(3) Upon receipt of the initial bid from the holder of the evidence of debt or the attorney for the holder, the officer shall make such information available to the general public.

COMMENTS: 1. Prior to posting the bid, it should be proofed for accuracy. The bid must recite all pertinent information indicated on the bid form regarding amounts, name and address of the foreclosing lender, date of the sale, and the interest rate at the time of sale. The bid must be signed and acknowledged by the foreclosing lender or signed by the attorney for the lender. If signed by the attorney for the lender, verify that the attorney’s registration number, phone number and address are indicated on the bid. 2. Determine what method will be used to provide this information to the general public. If utilizing a website, or if you are posting within your office, the same method should be consistently followed from week to week. 3. A pre-sale list should be made available to the public via a website or posted in your office in order to give as much advance notice of the bid amount prior to the sale as possible. This allows investors time to have funds ready on the date of the sale and gives notice to borrowers their property is going to foreclosure sale. A final version or a post-sale list should then be posted after the sale which would reflect any sales that were pulled at the last minute and continued and any overbids that resulted from third party bidders. 4. In particular, proof the bid to ensure the bidder is the same party as you show as the holder – there may have been a transfer of debt. Also verify the interest rate on the bid against the evidence of debt. A discrepancy from a fixed-rate loan suggests that a loan modification is missing.

(4) The officer shall enter the bid by reading the bid amount set forth on the bid and the name of the person that submitted the bid or by posting or providing such bid information at the time and place designated for sale.(5) Bids submitted pursuant to this section may be amended by the holder of the evidence of debt or the attorney for the holder in writing or electronically, as determined by the officer pursuant to section 38-38-112, no later than 12 noon the day prior to the sale, or orally at the time of sale if the person amending the bid is physically present at the sale or electronically during the sale is the sale is conducted by means of the internet or another electronic medium. A bid submitted pursuant to this section may be modified orally at the time of sale if the person making the modification modifies and reexecutes the bid at the sale.

COMMENTS: 1. If the bid is to be modified (amended) at sale, it is good practice to require written authorization from the holder, or holder’s attorney, giving the person attending the sale the authority to amend and reexecute the bid. No specific form for this authorization is required.

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2. A lender or an agent for the holder may wish to participate in the competitive bid process if there are third party bidders present. This is acceptable and benefits the borrower by increasing the amount of the secured debt satisfied either by reducing the deficiency or producing an overbid to be applied to the debts of junior lienors meeting the requirements of 38-38-111(2). 3. See Comments under (1)(a) above.

(6) The holder of the evidence of debt or the attorney for the holder shall bid at least the holder's good faith estimate of the fair market value of the property being sold, less the amount of unpaid real property taxes and all amounts secured by liens against the property being sold that are senior to the deed of trust or other lien being foreclosed and less the estimated reasonable costs and expenses of holding, marketing, and selling the property, net of income received; except that the holder or the attorney for the holder need not bid more than the total amount due to the holder as specified in the bid pursuant to subsection (2) of this section. The failure of the holder to bid the amount required by this subsection (6) shall not affect the validity of the sale but may be raised as a defense by any person sued on a deficiency.

COMMENT: While the public trustee is not responsible or liable for determining the amount or reasonableness of a bid at a sale (38-38-702), it is advisable to look at the amount(s) on the bid. If there is a questionable discrepancy, it would benefit the holder, and perhaps the owner, to at least question the amount prior to accepting and posting the bid. There may have been an error during preparation of the bid. If it is caught early enough, it would save time and potential court costs in the long term to bring it to their attention. The public trustee fees and costs on the bid should match with your records. If it doesn’t the bid should be rejected.

(7) (a) (I) Other than a bid by the holder of the evidence of debt not exceeding the total amount due shown on the bid pursuant to subsection (2) of this section, the payment of any bid amount at sale must be received by the officer no later than the date and time of the sale, or at an alternative time after the sale and on the day of the sale, as specified in writing by the officer. The payment must be in the form specified in section 38-37-108. If the officer has not received full payment of the bid amount from the highest bidder at the sale pursuant to this subsection (7), the next highest bidder who has timely tendered the full amount of the bid under this subsection (7) is deemed the successful bidder at the sale. (II) If the holder of the evidence of debt is the highest bidder with a bid that exceeds the total amount due shown on the bid pursuant to subsection (2) of this section, the holder of the evidence of debt is only required to pay the excess of the amount bid over the amount due the holder of the evidence of debt, as shown on the bid submitted pursuant to subsection (2) of this section.

COMMENTS: 1. The statutory default is for full payment to be made prior to time of sale, but the law allows for you to establish a policy permitting payment to be completed later that day. Allowing payment to be made after sale creates several potential problems, each of which is more likely in larger counties with a high volume of sales. A. Bidders may collude to rig the bidding by bidding a very high amount just after their partner’s bid, blocking the other bidders’ ability to continue. With no intent to actually pay the winning bid, the partner’s bid ends up winning. This is illegal bid rigging. This problem can be minimized if you have a policy that prohibits increasing the bid by more than a certain amount, such as $1000. B. Until the winning bidder brings the payment, you do not know who bought the property. C. While the sale by law passes to the next higher bidder who timely pays the required amount, how much time does that bidder have to bring in the funds, and what if the bidder does not do so? That bidder may be unreachable due to not expecting to need to pay, or may have bought other properties.D. The amount paid by the other bidder may have been unfairly inflated by a competing bidder who ran up the auction with no intent to pay. 2. Some of these problems may be mitigated if you require the bidder to leave a deposit covering part of the sale price. There is no statutory provision permitting you to retain those funds if the balance is not paid.

(b) The officer may establish written policies relating to all aspects of the foreclosure sale that are consistent with the provisions of this article. The written policies shall be made available to the general public.

COMMENT: It is recommended and encouraged for each public trustee to establish a written office policy regarding foreclosure sales. Once the policy is established and posted, adhere to the policy in order to maintain an unbiased and transparent approach to your foreclosure sale proceedings. If there is a need to change the policy, make sure you post and orally announce the change well in advance of the change taking effect. Always have your attorney review any policy prior to adopting and posting to your web site or within your office. An example of such policies and procedures is: Public Trustee Policies Public Trustee Sale Procedures

38-38-107. Fees and costs - definitions. (1) All fees and costs of every kind and nature incurred under the provisions of articles 37 to 39 of this title shall be fees and costs of the sale chargeable as additional amounts owing under the deed of trust or other lien being foreclosed. The amounts shall be deducted from the proceeds of any sale, or, if there are not cash proceeds from a sale adequate to pay such amounts, to the extent of the inadequacy, the

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amounts shall be paid by the holder of the evidence of debt. The officer may decline to issue the confirmation deed pursuant to section 38-38-501 until all sums due to the officer have been paid.

COMMENTS: 1. Your statutory fees become part of the total indebtedness included in the bid submitted in 38-38-106(2), including fees incurred but not yet paid such as the cost of recording the COP and issuing and recording a confirmation deed. 2. The bid form in 38-38-106(2) also states that the bid will be accompanied by a payment sufficient to cover any unpaid fees and costs due to your office. You should be sure to collect that money prior to sale. The remedies described here are not satisfactory. More often than not, there are no proceeds from the sale from which you could take your unpaid fees and costs, and the deed is not legally necessary for title to vest. 3. This also allows you to add your statutory fees to the amount required to cure under 38-38-104(2)(a)(II) to the extent that those fees and costs would be incurred during the cure. However, you would not, for example, include the cost of a future confirmation deed in the amount to cure, because if the cure is paid, there will be no deed. You also would need to refund to the party curing any fees and costs that were possible but not actually incurred, such as part of the cost of publication if it is cancelled due to the cure payment. 4. This also allows you to add the cost of issuing and recording a COR to the amount required to redeem under 38-38-302(4).

(3) Fees and costs include but are not limited to the following amounts that have been paid or incurred:COMMENT: The cost need only be incurred; it does not have to have been paid yet.

(a) Costs and expenses allowable under the evidence of debt, deed of trust, or other lien being foreclosed; and(b) Reasonable attorney fees and the costs incurred by the holder or the attorney for the holder in enforcing the evidence of debt, the deed of trust, or other lien being foreclosed or in defending, protecting, and insuring the holder's interest in the foreclosed property or any improvements on the property, including but not limited to:(I) All expenses actually incurred by the officer conducting the sale, publication costs, statutory notice costs and postage, and appraisal fees;(II) Any general or special taxes or ditch or water assessments levied or accruing against the property and any governmental or quasi-governmental lien, fine, penalty, or assessment against the property;(III) The premiums on any property, casualty, general liability, or title insurance acquired to protect the holder's interest in the property or improvements on the property;(IV) Sums due on any prior lien or encumbrance on the property, including the portion of an assessment by a homeowners' association that constitutes a lien prior to the lien being foreclosed; except that any principal that would not have been due in the absence of acceleration shall not be included in the sum due unless paid after the expiration of the time to cure the indebtedness pursuant to this article;(V) If the property is subject to a lease, all sums due under the lease;(VI) The reasonable costs and expenses of defending, protecting, securing, and maintaining and repairing the property and the holder's interest in the property or the improvements on the property, receiver's fees and expenses, inspection fees, court costs, attorney fees, and fees and costs of the attorney in the employment of the owner of the evidence of debt;(VII) Costs and expenses made pursuant to a valid order from a court of competent jurisdiction to bring the property and the improvements on the property into compliance with the federal, state, county, and local laws, ordinances, and regulations affecting the property, the improvements on the property, or the use of the property; and(VIII) Other costs and expenses that may be permitted by the deed of trust, mortgage, or other lien securing the debt or that may be authorized by a court of competent jurisdiction.

COMMENT: 1. 38-38-702(1)(a) limits your liability and responsibility for determining if these costs are reasonable. You may question the reasonableness of the costs, and ask for justification in the context of a cure or redemption because those requirements must be met to your satisfaction. There is no such clear statement concerning a bid, nor is there an express prohibition against such action. A redemption statement under 38-38-302(3) covers costs incurred over a limited time and must include receipts or invoices if the holder is not a qualified holder. 2. “Maintaining and repairing” the property has a narrow definition in 38-38-100.3(15) and does not include improving the property beyond its prior condition. Improvements can only be charged if ordered by a court in subparagraph (VII). 3. Some costs that holders have attempted to include and have been disallowed include the collection of other attorney fees owed from other cases and the amounts owed for a default alleged on another lien. Cross-collateralization agreements in some cases make these charges acceptable. 4. In view of the language of 38-38-702(1)(a), it is recommended that you become involved in these questions cautiously and only in egregious cases.

(c) As used in this subsection (3), "holder" means the holder of the certificate of purchase, the holder of the certificate of redemption, or the holder of the evidence of debt.(4) In the case of a redemption, the fees and costs listed in subsection (3) of this section that the holder of the certificate of purchase or certificate of redemption has paid or incurred as of the time of filing of the statement for redemption are allowable and shall be included in the statement of redemption if such amounts have not been included in a prior bid or statement of redemption.

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COMMENT: No double-charging. If the fee or cost was covered in a prior bid or statement, it cannot be included in a later redemption statement. This should be addressed by the public trustee only to the extent that it is obvious.

(5) Notwithstanding the provisions of subsections (1), (3), and (4) of this section, a holder of an evidence of debt, certificate of purchase, or certificate of redemption shall not accept from a provider of services or products related to property inspection, broker's price opinion, title report, appraisal, insurance, repair, or maintenance or from an agent or affiliate of the provider any payment, benefit, or remuneration of any kind, whether in the form of cash, employee, advertising, computer program or service, bank deposit, or other good or service in connection with a foreclosure in which a property inspection, broker's price opinion, title report, appraisal, insurance, repair, or maintenance service or product of the provider or an agent or affiliate of the provider was used, unless the total value of all payment, benefit, or remuneration received by the holder from the provider of the service or product is shown and credited against amounts owed to the holder in each bid, cure statement, or redemption statement.

COMMENTS: 1. In other words, no kick-backs. A holder of a COP may not pay, for example, $2,000 to an appraiser and then be returned $1,500 without crediting the amount against the claimed appraisal. This is not something the public trustee can enforce. 2. Arguably, but not directly, this provision would require a COP holder who pays for a one-year insurance premium and receives a refund of the last 11 months of the policy after being redeemed to pay that refund over to the party that redeemed the property. Once again, this is not something that the public trustee can enforce.

38-38-108. Date of sale. (1) Whenever property is to be sold following the foreclosure of any deed of trust or other lien by the officer, the initial date of sale shall be:(a) In the case of a sale of property by the public trustee that is not agricultural property, no less than one hundred ten calendar days nor more than one hundred twenty-five calendar days after the date of recording of the notice of election and demand;(b) In the case of a sale of property by the sheriff that is not agricultural property, no less than one hundred ten calendar days after the date of the recording of the lis pendens;(c) In the case of a sale of property by the public trustee, all of which is agricultural property, no less than two hundred fifteen calendar days nor more than two hundred thirty calendar days after the date of recording of the notice of election and demand; or(d) In the case of a sale of property by the sheriff, all of which is agricultural property, no less than two hundred fifteen calendar days after the date of the recording of the lis pendens.(2) (a) (I) If it is not evident from the legal description contained in the deed of trust or other lien being foreclosed whether the property described therein is agricultural property, the officer shall make that determination no less than ten calendar days nor more than twenty calendar days after the recording of the notice of election and demand; except that the officer may make the determination at any earlier time upon presentation of acceptable evidence that the property is not agricultural property. The officer shall accept the following as evidence that the property is not agricultural property:(A) A certified copy of the subdivision plat containing the property or any portion thereof recorded in the office of the clerk and recorder of the county where the property or any portion thereof is located; or(B) A written statement by the clerk of the city, town, or city and county, dated no more than six months before the date of filing of the notice of election and demand or lis pendens with the officer, that all or a portion of the property was located within the incorporated limits of the city, town, or city and county as of the date of recording of the deed of trust or other lien or as of the date of the statement.(I.5) The officer shall accept, as evidence that the property is agricultural property, a written statement by the assessor of the county where the property is located, dated no more than six months before the date of filing of the notice of election and demand or lis pendens with the officer, that all of the property was valued and assessed as agricultural property after the date of the recording of the deed of trust or as of the date of the statement.(II) The officer's determination of whether the property is agricultural or nonagricultural property shall be binding and may be relied upon by all parties.(b) The statements described in sub-subparagraph (B) of subparagraph (I) and subparagraph (I.5) of paragraph (a) of this subsection (2) may be obtained and furnished at the expense of the person seeking the determination of whether the property is agricultural or nonagricultural property, which expense may be included as a portion of the fees and costs of the foreclosure.(3) The provisions of this section shall not apply to sales following an execution and levy.(4) Notwithstanding the designation of property valued and assessed as other than agricultural property according to the definition of “agricultural property” in section 38-38-100.3 (1) (c), an assessor’s nonintegral classification of two acres or less of land on which a residential improvement is located, as described in section 39-1-102 (1.6) (a) (I) (A), C.R.S., is not determinative of whether the property is agricultural for purposes of paragraphs (c) and (d) of subsection (1) and subparagraph (I.5) of paragraph (a) of subsection (2) of this section.

38-38-109. Continuance of sale - effect of bankruptcy - withdrawal of sale.

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(1) Continuance. (a) For any reason deemed by the officer to be good cause or upon written request by the holder of the evidence of debt or by the attorney for the holder, at any time before commencement of the sale, the officer may continue the sale to a later date by making, at the time and place designated for the sale, an oral announcement of the time and place of such continuance, or by posting or providing a notice of the continuance at the time and place designated for the sale, which shall include the time and place to which the sale is continued. Except as provided in subparagraph (I) of paragraph (b) of subsection (2) of this section, a sale that is not held on the then-scheduled date of sale and is not continued from the then-scheduled date of sale pursuant to this paragraph (a) shall be deemed to have been continued for a period of one week, and from week to week thereafter in like manner, until the sale is held or otherwise continued pursuant to this paragraph (a). No sale shall be continued to a date later than twelve months from the originally designated date in the combined notice, except as provided in subsection (2) of this section.

COMMENTS: 1. Be sure that any continuance request from the holder is in writing. An email is acceptable. 2. If you do not officially change the sale date in your records, the sale date is delayed by one week. 3. If the sale does not occur because a bankruptcy stay applies that will require a restart of the file, the sale date is not continued because a restart will be required. 4. What is “good cause” for the officer to not go to sale? Usually, it will be an unresolved discrepancy in the foreclosure file. Examples might include failure to timely receive the OAS or a defective OAS, lack of a bid or payment of required fees and costs, a well-founded belief that the deferment notices were not posted correctly, a concern about the accuracy of the legal description, or even credible objections raised at the last moment by the borrower. Refusing to take the property to sale is within your rights if you are not satisfied – as long as your reasons are good. Consult with an attorney if you are unsure. 5. Another possible example of “good cause” would be a homeowner who comes in the afternoon prior to sale with the correct funds to pay a cure. The cure statement is valid for the entire day, but the payment must be made by noon on the day prior to sale under 38-38-104(2)(b). If you continue the sale for one week, the cure payment may be accepted. Note that this would not apply if the current sale date is the last possible sale date before the sale must be withdrawn. 6. The one-year period to the last possible sale date is extended due to a bankruptcy stay (or temporary restraining order or other injunction) under paragraphs (2)(a) and (2)(d). The last possible sale date is not extended due to a deferment under part 8 or following a rescission under 38-38-113.

(b) At the request of the holder of the evidence of debt or the attorney for the holder or upon the officer’s own initiative, the officer shall correct any errors in a published combined notice and shall continue the then-scheduled date of sale to a future date within the period of continuance allowed by paragraph (a) of this subsection (1) to permit a corrected combined notice to be published or the original combined notice to be republished pursuant to section 38-38-103 (5). If the officer failed to publish the combined notice as required by section 38-38-103 (5), the officer shall continue the then-scheduled date of sale to a future date within the period of continuance allowed by paragraph (a) of this subsection (1). The future date of sale to which the sale is continued pursuant to this paragraph (b) shall be no later than thirty calendar days after the fifth publication of the corrected combined notice or republished combined notice. The officer shall mail a copy of the combined notice, or corrected combined notice if the original combined notice was erroneous, to the persons and addresses on the most recent amended mailing list no later than ten calendar days after the first correct publication or republication and no less than forty-five calendar days prior to the actual date of sale in the same manner as set forth in section 38-38-103. If there is no amended mailing list, the officer shall mail a copy of the combined notice, or corrected combined notice if the original combined notice was erroneous, to the persons as set forth in the mailing list.

COMMENTS: 1. A good rule of thumb for continuing the sale to republish is to pick a date at least 65 days away by analogy to 38-38-103(2)(a). This will give you time to schedule the new publication, verify the proofs, complete publication during the window, and also send the required mailing. 2. Although not required, PTAC recommends that you not charge for the 2nd publication if the error is your fault and that otherwise you charge for the second publication.

(c) (I) (A) If a cure statement is not timely filed, the sale will be continued pursuant to section 38-38-104 (7). COMMENTS: 1. A late cure statement results in a one-week continuance of the sale for each week the statement is late. If there is no sale in the following week, continue to the next sale date, but do not continue the sale again if the cure statement is not received the second week as this time period has already been covered by the initial continuance. 2. Also do not continue the sale for failure to provide a cure statement during a bankruptcy stay. Some attorneys argue that the stay prevents them from providing the statement. Others take the position that the statement is only complying with a request from the borrower. 3. You would double-continue the sale if there is a late affidavit of posting the deferment eligibility notice under 38-38-802(5)(b) and 38-38-103(5)(d)(II), as well as a late cure statement.

(III) When the property is to be sold by the sheriff, if the cure statement is not filed with the sheriff by 12 noon on the seventh calendar day before the last date of sale permitted under paragraph (a) of this subsection (1), the foreclosure action shall be deemed dismissed, and the holder of the evidence of debt or the attorney for the holder shall file a motion to dismiss with the court. Upon good cause shown, the

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holder or the attorney for the holder may file a motion with the court requesting further relief as the court may deem necessary or appropriate in the circumstances. The sheriff shall record the order of dismissal or other order of the court and collect all fees and costs actually incurred by the sheriff.(2) Effect of bankruptcy proceedings. (a) If all publications of the combined notice prescribed by section 38-38-103 (5) or 13-56-201 (1), C.R.S., have been completed before a bankruptcy petition has been filed that automatically stays the officer from conducting the sale, the officer shall announce, post, or provide notice of that fact on the then-scheduled date of sale, take no action at the then-scheduled sale, and allow the sale to be automatically continued from week to week in accordance with paragraph (a) of subsection (1) of this section unless otherwise requested in writing prior to any such date of sale by the holder of the evidence of debt or the attorney for the holder.

COMMENTS: 1. If publications are complete before the bankruptcy is filed, the only remaining action of the public trustee that is affected by the stay is going to sale. Once the stay is lifted, you continue the sale date week-to-week or as directed by the holder, since the property may go to sale as soon as the stay is lifted if all other normal requirements for sale are met. 2. Per paragraph (e), the one-year deadline for sale is extended during the bankruptcy stay. The period of stay to be added to the normal one-year period is the time period from the scheduled date of sale on the date the bankruptcy is filed through the scheduled date of sale on the date the stay is lifted in the absence of a court order to the contrary. Remember that a bankruptcy court order granting relief from the automatic stay is effective 14 days after the date of the order, unless the order states otherwise. Other orders lifting the stay are effective the date of the order, unless the order states otherwise. 3. If you learn of the bankruptcy after the completion of publications, but it was filed prior to the completion of publications (or on the same day), then paragraph (b) applies because publication after filing of the bankruptcy was in violation of the bankruptcy stay.

(b) (I) If the publications of the combined notice prescribed by section 38-38-103 (5) or 13-56-201 (1), C.R.S., have not been started or if all the publications have not been completed before the day a bankruptcy petition has been filed that automatically stays the officer from conducting the sale, the officer shall immediately cancel any remaining publications of the combined notice and, on the date set for the sale, announce, post, or provide a notice that the sale has been enjoined or has been stayed by the automatic stay provisions of the federal bankruptcy code of 1978, title 11 of the United States Code, as amended. The sale shall not be continued under paragraph (a) of subsection (1) of this section.

COMMENTS: 1. If the final publication is on the same date as the bankruptcy is filed, publications are considered NOT complete.2. While the law does not describe this, If a bankruptcy is found to have been filed prior to the recording of the NED, the NED recording was in violation of the stay. The foreclosure must be withdrawn (which can be done while the stay is in effect) and then the lender or lender’s attorney may file a new foreclosure once relief from bankruptcy stay, abandonment of the foreclosed property by the bankruptcy trustee, or dismissal or closure of bankruptcy has occurred.

(II) (A) Upon the termination of any injunction or upon the entry of a bankruptcy court order dismissing the bankruptcy case, abandoning the property being foreclosed, closing the bankruptcy case, or granting relief from the automatic stay provisions of the federal bankruptcy code of 1978, title 11 of the United States Code, as amended, and upon receipt of a request from the holder of the evidence of debt or the attorney for the holder to restart the action, the public trustee shall rerecord the notice of election and demand and proceed with all additional foreclosure procedures provided by this article 38 as though the foreclosure had just been commenced.

COMMENTS: 1. Restart the file only after request from the holder. You have the same ten business days to process the request that you have under 38-38-102 for a new start. 2. This is the most common “restart” of a foreclosure. It resets all deadlines and requires the re-accomplishment of all tasks. If the law has changed from the initial filing to the restart, the new law applies to the restarted file. The most notable effects of the restart are that the initial and final possible sale dates are reset from rerecording of the NED, and any lien recorded after the initial recording of the NED but before the rerecording would gain the right to cure and redeem. 3. “Relief” from stay includes only dismissal, abandonment, closure, or an order of relief. An order of relief takes effect 14 days after it is granted, unless the order states otherwise.

(B) If the request is not received by the public trustee within one year from the date of the termination of any injunction or the entry of a bankruptcy court order dismissing the bankruptcy case, abandoning the property being foreclosed, closing the bankruptcy case, or granting relief from the automatic stay, the foreclosure shall be withdrawn according to subsection (3)(b) of this section. (III) When the property is to be sold by the sheriff under any statutory or judicial foreclosure or upon execution and levy made pursuant to any court order or decree, upon the notification of termination of any injunction or upon the entry of a bankruptcy court order dismissing the bankruptcy case, abandoning the property being foreclosed, closing the bankruptcy case, or granting relief from the automatic stay provisions of the federal bankruptcy code of 1978, title 11 of the United States Code, as amended, the sheriff shall forthwith establish a new date of sale and republish a new combined notice pursuant to section 13-56-201 (1), C.R.S.

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(c) (I) If a sale is held in violation of the automatic stay provisions of the federal bankruptcy code of 1978, title 11 of the United States Code, as amended, and an order is subsequently entered by a bankruptcy court of competent jurisdiction dismissing the bankruptcy, abandoning the property being foreclosed, or closing the bankruptcy case, or an order is subsequently entered granting relief from the automatic stay provided by the federal bankruptcy code, then the evidence of debt, deed of trust, or other lien being foreclosed shall immediately be deemed reinstated, and the deed of trust or other lien shall have the same priority as if the sale had not occurred. Immediately upon reinstatement, the power of sale provided therein, if any, shall be deemed revived.

COMMENTS: 1. If a 3rd party bidder purchases property that is later found to be subject of a bankruptcy that was filed prior to the sale, there would be two ways in which to proceed with the disbursement of the sale proceeds; A. If the funds have been unconditionally credited to your account but have not been disbursed to the holder, then it is acceptable to issue a refund directly to the successful bidder with written agreement from the holder or holder’s attorney. B. If the public trustee is not notified until after the funds have been disbursed to the holder, then it would be up to the holder or holder’s attorney to return the funds directly to the bidder. C. If in doubt, seek legal advice. 2. You do not record any document that voids the COP. You also do not record any document that voids a deed if issued – notify the assessor to ignore the vesting deed and upon request provide a copy of the bankruptcy filing document to the assessor. 3. The reinstatement is to occur after the bankruptcy stay is lifted.4. Unlike with publications, the time of the filing matters in this case. During sale, make a note of the time each property is actually sold. If the bankruptcy is filed later in the day, then it has no effect on the sale.

(II) If the holder of the evidence of debt, deed of trust, or other lien reinstated pursuant to subsection (2)(c) or the attorney for the holder notifies the officer in writing of the entry of an order dismissing the bankruptcy case, abandoning the property being foreclosed, closing the bankruptcy case, or granting relief from the automatic stay provided by the federal bankruptcy code of 1978, title 11 of the United States Code, as amended, no later than fifty calendar days prior to the last possible sale date pursuant to subsections (1)(a) and (2)(e) of this section, the officer shall set a new date of sale at least twenty-four calendar days but not more than forty-nine calendar days after the date on which the official receives such notice. No later than ten business days after receiving such notice, the officer shall mail an amended combined notice containing the date of the rescheduled sale to each person appearing on the most recent mailing list. No later than twenty calendar days after receiving such notice, but no less than ten calendar days prior to the new date of sale, the officer shall publish the amended combined notice, omitting the copies of the statutes, one time only in a newspaper of general circulation in the county where the property is located.

COMMENTS: 1. The fee for this is $50. 2. The timelines for rescheduling the sale and publishing the notice are different from the deadlines that apply after a rescinded sale in 38-38-113. 3. If you receive notice of lifting of the stay accompanied by a request to withdraw, you are not required to reschedule everything and immediately cancel it. Charge the fee, and then withdraw the file.

(III) If the holder of the evidence of debt, deed of trust, or other lien reinstated pursuant [to] this subsection (2)(c) or the attorney for the holder does not notify the officer in writing of the entry of an order dismissing the bankruptcy case, abandoning the property being foreclosed, closing the bankruptcy case, or granting relief from the automatic stay provided by the federal bankruptcy code of 1978, title 11 of the United State Code, as amended, within the time allowed under subsection (2)(c)(II) of this section, the officer shall administratively withdraw the sale pursuant to subsection (3)(b) of this section upon receipt of the order dismissing the bankruptcy case, abandoning the property being foreclosed, closing the bankruptcy case, or granting relief from the automatic stay provided by the federal bankruptcy code of 1978, title 11 of the United State Code, as amended.(IV) All fees and costs of providing and publishing the amended combined notice and publication shall be part of the foreclosure costs.

COMMENT: The holder and holder’s attorney have the responsibility to notify the public trustee of the bankruptcy stay in time to stop the sale and to not place a bid during a bankruptcy stay.

(d) If a sale is set aside by court order, unless the court order specifies otherwise, the following procedures apply:(I) Upon receipt of the court order, the public trustee’s fee specified in section 38-37-104(1)(b)(XI), and the costs of recording the court order as specified in this subsection (2)(d), the public trustee shall attach to the order a copy of the certificate of purchase, any assignments thereof, and, if applicable, the confirmation deed, each marked “null and void”, and record the order together with these documents.(II) Upon recordation of the court order, the certificate of purchase shall be deemed canceled as if the sale had not occurred, and the evidence and deed of trust are deemed fully reinstated with the same lien priority as if the sale had not occurred.(III) Within ten calendar days after receipt of all documents, fees, and costs specified in subsection (2)(d) of this section, the public trustee shall mail a copy of the court order to each person entitled to receive the combined notice pursuant to section 38-38-103.(IV)(A) After the recording of the court order, the holder of the evidence of debt or the holder’s assignee of the attorney for the holder or the attorney for the assignee may notify the public trustee in writing to reschedule the sale within one year of the issuance of the order. The public trustee shall set a new date of sale at least thirty calendar days but not more than forty-five calendar days after the date on

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which the public trustee received notice to schedule a new date of sale subject to the requirements of subsections (1)(a) and (2)(e) of this section, but not earlier than the scheduled sale date as of the date of the court order.(B) No later than ten calendar days after receiving notice to schedule a new date of sale, the public trustee shall mail a combined notice setting forth the rescheduled date of sale to each person entitled to receive the combined notice pursuant to section 38-38-103.(C) No later than twenty calendar days after receiving notice to schedule a new date of sale, but no less than ten calendar days prior to the new date of sale, the public trustee shall publish the sale one time only. Such publication must be in the format specified for publication by section 38-38-103.(D) All fees and costs of the public trustee for actions performed under this section and the cost of recording the court order and documents incorporated into the court order by attachment are part of the foreclosure costs.(E) After a sale has been set aside and subsequently rescheduled pursuant to this subsection (2)(d)(IV), the sale may be continued in accordance with subsections (1)(a) and (2)(e) of this section.(F) If a written request to reschedule the sale is not received by the public trustee within one year of the issuance of the order, the foreclosure must be withdrawn according to subsection (3)(b) of this section.(V) Nothing in this section prevents the foreclosing lender from seeking a rescission of sale pursuant to section 38-38-113 if the requirements within section 38-38-113(1) are met.

COMMENTS: THIS SECTION WAS AMENDED IN THE 2018 LEGISLATIVE SESSION(e) The periods for which a sale may be continued under this subsection (2) shall be in addition to the twelve-month period of continuance provided by subsection (1) of this section.

COMMENT: While the bankruptcy stay is in effect, the one-year clock is not running. After a bankruptcy stay imposed after the completion of publications is lifted, recalculate the final sale date. Calculate how many days of the one-year clock to go to sale after the initial sale date were left when the bankruptcy was filed by comparing the sale date as of the date of the filing of the bankruptcy with the initial sale date. Add that remaining number of days to the scheduled date of sale (the sale will be continuing week to week automatically under 38-38-109(1)(a) unless the holder or holder’s attorney has continued the sale for a longer period) when the bankruptcy stay is lifted to get the final possible sale date. For example, if the sale had already been continued for 70 days (10 weeks) past the initial sale date on the date the bankruptcy was filed, then when the stay is lifted the holder would have 295 days remaining from the scheduled sale date on the date the stay is lifted to the final sale date. If the initial sale date had not passed when the bankruptcy was filed, then the holder would have the full 365 days remaining from the scheduled sale date on the date the stay is lifted. In the unlikely event that the stay is placed and lifted within the narrow window between the completion of publications and the original sale date, then there would be no change to the final possible sale date. For multiple bankruptcies, you would calculate this date based on what was remaining when the subsequent bankruptcy was filed.

(3) Withdrawal. (a) If the holder of the evidence of debt or the attorney for the holder files with the public trustee, prior to sale, a written withdrawal of the notice of election and demand, the foreclosure proceedings shall terminate. The public trustee shall record the withdrawal and collect all fees and costs owed and incurred, including a withdrawal fee in the amount authorized by section 38-37-104 (1) (b) (V).

COMMENTS: 1. The law does not specify the format to use for a withdrawal. In order to get the withdrawal of the NED properly indexed against the NED, the paperwork should at least include the foreclosure file number, the recording information from the NED, the names of the grantor and holder, and be signed and acknowledged by the holder or signed by the holder’s attorney. 2. It is good practice for the withdrawal also to be signed by the public trustee or a deputy after being reviewed. 3. The fee for a withdrawal is $35. 4. Be sure to cancel any remaining publications and receive any outstanding fees from the holder before processing the withdrawal. If you have not received the balance due, do not consider the withdrawal as filed. If there is a balance due back to the holder from the initial deposit, refund it.

(b) If there is no sale and if a withdrawal is not filed within forty-five calendar days after the last date of sale permitted by law, the public trustee may transmit by mail or electronic transmission to the attorney for the holder of the evidence of debt, or if no attorney then to the holder, a notice that a withdrawal of the notice of election and demand may be recorded by the public trustee unless a response requesting that such withdrawal be delayed for ninety calendar days is received by the public trustee within thirty calendar days after the date the public trustee's notice is transmitted. If such response is received by the public trustee and there is no sale nor is a withdrawal filed within the ninety-day delay, the public trustee may record a withdrawal of the notice of election and demand. If no such response is received by the public trustee within thirty calendar days after the notice is transmitted, the public trustee may record a withdrawal of the notice of election and demand at any time after the expiration of such thirty-day notice period. If a withdrawal is recorded during the pendency of an automatic stay imposed on the sale based on any proceeding filed under the federal bankruptcy code of 1978, title 11 of the United States Code, as amended, the withdrawal shall be void and of no force and effect, and the public trustee shall mail to all persons on the mailing list a notice that the withdrawal of the notice of election and demand occurred during the pendency of an injunction or bankruptcy stay and is void and of no force and effect. The public trustee shall cause the notice to be recorded in the office of the county clerk and recorder of the county where the property described in the notice is located. All unpaid fees and costs owed and incurred by the public trustee, as well as a withdrawal fee in the amount authorized by section 38-37-104 (1) (b) (VI), shall be paid by the holder. The amount

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due shall accrue interest at the rate provided by law. Until all amounts due and owing are paid, the public trustee shall be entitled to hold all documentation in the public trustee's possession and to withhold all other services requested by the holder or the attorney for the holder with respect to the deed of trust or other lien being foreclosed.

COMMENTS: 1. Following 45 days after the last possible sale date, notify the attorney that you will withdraw the file in 30 days after the notice is sent unless the attorney requests a 90-day extension to this time and the request is received by you within 30 days after the notice is sent. When the extension expires, or if no extension request is received within 30 days, create an administrative withdrawal notice with the same information as in (a) above and record it. The fee for administrative withdrawal is $50. 2. The statutory interest on the administrative withdrawal is 8% per annum, compounded monthly. There is no sure way to receive payment, you cannot refuse other work from that attorney, but it would be reasonable to decline to allow a balance due after the deposit is expended – get payment in full prior to publishing, etc. You may also report a delinquent attorney to the Colorado Supreme Court’s office of attorney regulation, though the small amounts at stake may not result in quick action. 3. The bankruptcy language applies only to the administrative withdrawal – it is perfectly fine for an attorney to initiate a withdrawal during a bankruptcy, though some may choose not to do so. The administrative withdrawal during bankruptcy is void because the final sale date cannot be reached during a bankruptcy.

38-38-110. Sales by officer - location - announcement - records. (1) (a) (I) Notwithstanding the provisions of any deed of trust or other lien being foreclosed, the officer shall conduct the sale at any door or entrance to, or in any room in any building temporarily or permanently used as, a courthouse or at or within any building where the office of the county clerk and recorder or the office of the officer is located, which place shall be specifically designated in the combined notice; except that a sale may be conducted by means of the internet or other electronic medium. The county, the officer, and employees of the county of the officer, acting in their official capacities in preparing, conducting, and executing a sale under this article by means of the internet or another electronic medium, are not liable for the failure of a device that prevents a person from participating in a sale under this article.

COMMENT: Power lines go down, the local internet service may be undependable, computers may malfunction. The public trustee is not liable for these kinds of problems and failures. The authors do not believe that the drafters of the Act intended to limit the immunity of a public trustee by this language.

(II) As used in this paragraph (a), “device” includes any computer hardware, computer network, computer software application, or web site;(b) The combined notice shall designate the actual place of sale or, if the sale is conducted by means of the internet or another electronic medium, the information prescribed by section 38-38-103 (4) (a) (VII).(2) At a sale, the officer shall read only the public trustee's sale number for a sale by the public trustee or the court case number for a sale by the sheriff, the name of the original grantor, the street address or, if none, the legal description of the property, the name of the holder of the evidence of debt, the date of sale, the first and last publication dates of the combined notice, and, in accordance with section 38-38-106 (4), the amount of the bid and the name of the person that submitted the bid. In lieu of reading the information listed above, the officer may post the information at the location of the sale or provide a written copy of the information to all persons present at the sale, or post the information on the internet or other electronic medium if the sale is conducted by means of the internet or another electronic medium.(3) Whenever a public trustee sells property described in a deed of trust, the public trustee shall enter in the records of the office of the public trustee the name of the person executing the deed of trust, the book and page or reception number of the recorded deed of trust, a brief description of the property therein described, the date of sale, the publisher of the combined notice, a list of the names and addresses of the persons to whom the combined notice was mailed, the name and last mailing address of the purchaser at the sale, and the amount at which the property was sold in separate parcels, if so sold, or en masse.

COMMENT: It is recommended that your office have a sale policy which is posted for public view, either on a website or within your office. You should also have a sale script, such as indicated below, to follow on a routine basis. Having a sale script helps when it is necessary for a deputy to conduct the sale. The investors become acquainted with your process and deviation can become confusing. The sale script should be changed to meet your sale policy requirements. Sample Conduct of Sale Script

38-38-111. Treatment of excess proceeds. (1) An overbid shall be first applied to any deficiency as indicated in the holder’s bid, and then paid to the officer to be held in escrow until the end of all redemption periods as provided in section 38-38-302.

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COMMENT: An overbid is applied first to any deficiency bid up to the total amount owed to the holder as shown in the bid. Overbid funds due to the holder should be tendered once it is determined you have funds in your account for which the bank has given you final credit. The length of time the funds are held for clearing the public trustee account is determined by the individual public trustee. Be sure to consult with your bank so you know when particular funds will be finally credited. Note that funds provisionally or conditionally credited to your account can later be debited by your bank.

(2) Upon the expiration of all redemption periods provided in section 38-38-302, any remaining overbid shall be paid in order of recording priority to junior lienors, determined as of the recording date of the notice of election and demand or lis pendens according to the records, who have duly filed a notice of intent to redeem and whose liens have not been redeemed pursuant to section 38-38-302, in each case up to the unpaid amount of each such lienor's lien plus fees and costs. A lienor holding a lien that is not entitled to redeem by virtue of being recorded after the notice of election and demand, a lienor that has not timely filed a notice of intent to redeem pursuant to section 38-38-302, or a lienor who accepts less than a full redemption pursuant to section 38-38-302 (4) (c) shall not have any claim to any portion of the overbid. After payment to all lienors and the holder entitled to receive a portion of the overbid pursuant to this section, any remaining overbid shall be paid to the owner.

COMMENTS: 1. The recording date of the deed of trust, judgment lien or other instrument or document based upon which a junior lienor may file a NOIR is generally the date used to establish the lien position priority. The lien with the oldest recording date would be the senior lienor, the lien with the next later recording date would be junior to that lien and so on. One exception to the general rule is the split priority of an HOA lien. A portion of the lien that is prior to even a first deed of trust, while the remainder is junior only to a first deed of trust under 38-33.3-316. Subsection (4) of that statute provides that recording of the declaration (which normally will be long before recording of the deed of trust being foreclosed) constitutes record notice and perfection of the lien, and no further recordation of any claim of lien for assessments is required. This creates a difficult situation when read with 38-38-111(2), which says that remaining overbid proceeds are to be paid in order of recording priority to junior lienors. In the opinion of PTAC legal counsel, the two statutes must be read together with the result that the subordinated portion of the junior lien will always be treated as the senior junior lienor, both for redemption purposes and for payment of overbid funds. This would be true even if a notice of lien is recorded by the HOA with respect to its lien because the lien priority dates back to the recording of the declaration, which should always be prior to the recording of any of the other junior liens. In any case, the recording of the declaration will establish priority of the HOA lien for disbursement of overbid funds with respect to the subordinated portion of its lien. Note also with respect to mechanic’s liens that, under 38-38-306(2), the priority date for redemption, and also for overbid disbursement, is the recording of the lien statement, although a different and earlier priority date is applicable under mechanic’s lien law. See 38-22-109. In the opinion of PTAC legal counsel, any overbid funds payable to an HOA lien claimant which has not reduced its claim to judgment must be held on the same terms and conditions specified in 38-38-306(2) for mechanic’s lien documentation because 38-33.3-316(1) states that an HOA lien is a statutory lien. You should consult your attorney before ultimate disbursement of those funds in the absence of an absolutely clear court order. 2. If no junior lienor files an Intent to Redeem within eight business days after the sale, a redemption period is not established. The record owner of the property at the time the NED was recorded is entitled to all of the overbid proceeds (after application to any holder deficiency bid) as soon as nine business days after the sale. Check with the assessor in your county to verify who the owner was at the time the NED was recorded. Don’t rely on the certificate of Current Owner provided by the lender’s attorney. Exercise your due diligence in determining current ownership by researching the records of your county assessor. Many times you will find that the certificate was not correct. PTAC legal counsel recommends that you not rely on the assessor records, unless you are satisfied that they are current and accurate. Requiring that evidence satisfactory to you from a title company be provided by the owner prior to payment would be prudent in order to avoid any possibility that you may be subjected to possibility of double payment.3. At the end of all redemption periods, the funds shall be disbursed in the order of lien priority from most senior to most junior to each lienor who has not been redeemed up to the lien amount. It is not up to the public trustee to determine whether or not the lienor that has redeemed last is being unjustly enriched by receiving both the deed to the property as well as the overbid proceeds up to the lien amount claimed on the statement because we do not know the value of the property nor are we required to determine the value of the property. If, after paying the required lienors there are funds left they shall be disbursed as described in statute above. 4. The PTAC attorney has advised the following: “In my opinion you do not have the authority to divide the funds. They should be paid as the documentation provided to you in the foreclosure indicates the interest is held. For example, if it is payment of proceeds of an overbid to the holder who made a deficiency bid, and the holder is shown on the DOT as “A and B,” you would make your payment in a single check payable to “A and B.” The check can be delivered to either of them and it will be their responsibility to deal with getting the check cashed. There is a presumption that two parties named as described above are equal tenants in common, but that is a question of fact above our pay grade. If you paid half to one of them, the other might come out of the woodwork later and be able to

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prove she had a 99% interest, which obviously would not be good for you. Another possibility would be to interplead the funds into court and let the court decide, but this should be the responsibility of the owners.

(2.5)(a) If a public trustee maintains a web site for his or her office, the public trustee shall include the following statement on such web site:NOTICE TO AN OWNER IN FORECLOSURE: If your property goes to foreclosure auction sale and is purchased for more than the total owed to the lender and to all other lien holders, please contact the public trustee’s office after the sale because you may have funds due to you.(b) In order to pay the owner of the property as required pursuant subsection (2) of this section, a public trustee shall send a notice to the owner. If the amount of remaining overbid is equal to or greater than twenty-five dollars, the public trustee shall make reasonable efforts to identify the owner’s current address. The public trustee shall mail the owner a notice regarding the remaining overbid to the best available address no later than thirty days after the expiration of all redemption periods as provided in section 38-38-302.

COMMENT: In addition to sending the required notice specified above, it is good office policy to send the overbid letter to the record owner as of the recording of the NED as soon as the deadline for filing an intent to redeem is passed, if you know that overbid funds will be remaining. Many times the owner is still in the property for a few days after the sale has occurred and you have a better chance of reaching them if you notify them immediately after the sale rather than waiting until you schedule publication of the overbid proceeds. However, remember the current owner may not have been the owner at the time the NED was recorded.

(c) An agreement to pay compensation to recover or assist in recovering an amount due to the owner from the Public Trustee under subsection (2) of this section is not enforceable. A person who induces or attempts to induce another person to enter into such an agreement commits a misdemeanor, as defined in section 18-1.3-504, C.R.S., and is subject to imprisonment in county jail for up to six months, a fine of up to ten thousand dollars, or both.

COMMENTS: This section addresses the validity of the agreement, the unenforceable nature of such an agreement, and the consequences of attempting to make such an agreement with the public trustee. Although not prohibited expressly, it is reasonable to say that the public trustee should not even consider entering into such an agreement. If approached to make such an agreement, the public trustee should notify the authorities.

(3)(a) (I) When the property is sold by the sheriff, all of the sale proceeds must be deposited into the registry of the court. (II) When the property is sold by the public trustee, any unclaimed remaining overbid from a foreclosure sale shall be held by the public trustee in escrow. The remaining overbid shall be held for six months from the date of the sale. The public trustee is answerable for the funds without interest at any time within the six-month period to any person legally entitled to the funds. Any interest earned on the escrowed funds must be paid to the county at least annually. Unclaimed remaining overbids that are less than twenty-five dollars and that are not claimed within six months from the date of sale must be paid to the general fund of the county and such money paid to the general fund of the county becomes the property of the county. Unclaimed remaining overbids that are equal to or greater than twenty-five dollars and that are not claimed within six months from the date of the sale are unclaimed property for purposes of the “Unclaimed Property Act”, article 13 of this title 38, and must be transferred to the administrator in accordance with article 13. After the unclaimed remaining overbids are transferred to the administrator or to the general fund of the county, the public trustee is discharged from any further liability or responsibility for the money;

COMMENT: Your office must have some type of tracking mechanism in place to track the unclaimed overbid proceeds by foreclosure number or some other identifying method in order to provide as much contact information as possible when the funds and report are submitted to the Colorado State Treasurer, information such as, last known address, name of party to whom the funds are payable will be needed..

(b) If the unclaimed remaining overbids exceed five hundred dollars and have not been claimed by any person entitled thereto within sixty calendar days after the expiration of all redemption periods as provided by section 38-38-302, the public trustee shall, within ninety calendar days after the expiration of all redemption periods, commence publication of a notice for four weeks, which means publication once each week for five successive weeks in a newspaper of general circulation in the county where the subject property is located. The notice must contain the name of the owner, the owner's address as given in the recorded instrument evidencing the owner's interest, and the legal description and street address, if any, of the property sold at the sale and must state that an overbid was realized from the sale and that, unless the funds are claimed by the owner or other person entitled thereto within six months after the date of sale, the funds shall be transferred to the state treasurer as part of the “Unclaimed Property Act”. The public trustee shall also mail a copy of the notice to the owner at the best available address. (c) The fees and costs of publication and mailing required pursuant to this subsection (3) must be paid from the money escrowed by the public trustee.(4) A lienor who accepts a redemption amount less than the full amount of a lien or a holder of an evidence of debt who accepts a redemption amount less than the amount bid at a sale prior to the expiration of all applicable redemption periods under this article shall not be entitled to receive a portion of any excess proceeds pursuant to this section.

COMMENT: Per 38-38-305, a lessee, easement holder, and installment land contract vendors whose interests are evidenced by instruments recorded prior to the NED are considered lienors who may file a Notice of Intent to Redeem. Lessees and easement holders have liens without any lien amount. Because there is no dollar amount claimed on the statement, these particular type of lienors would not be entitled to any overbid proceeds.

(5) As used in the section, unless the context otherwise requires, “owner” means the record owner of the property as of the recording of the notice of election and demand or lis pendens.

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38-38-112. Use of electronic documents authorized.(1) Repealed.(2) Consistent with the provisions of the "Uniform Electronic Transactions Act", article 71.3 of title 24, C.R.S., any document or record related to a foreclosure may be accepted by the officer in an electronic format or may be made available to the public by the officer in an electronic format. The officer shall establish and uniformly apply written policies for determining whether and the extent to which the officer shall accept documents or records in electronic form; except that the officer shall not require the use of an electronic format for any purpose under this article except as necessary for sales conducted by means of the internet or another electronic medium.

COMMENTS: 1. If you accept electronic documents, you need to have a written policy stating this, and the policy should be publicly available. 2. Electronic documents may not be used to replace a requirement for an “original” document. 3. You may not ever refuse to accept documents provided on paper. While this section does not say so, the provisions of 38-37-104(1) would not allow you to charge an extra fee for handling paper documents. 4. While this section refers to foreclosure documents in particular, it is generally accepted that this, or the rest of the Uniform Electronic Transactions Act, allows the acceptance of release documents in electronic format as well. Foreclosures may be specifically excluded because 24-71.3(3)(b)(III) excludes notices of foreclosure and the right to cure from among the documents that may be handled electronically. That subparagraph echoes this section in allowing communication between holder and public trustee to be electronic and allowing the public trustee to store documents electronically. The limitation applies to the notices mailed and published under 38-38-103 and the other sections of the law that refer back to that section.

38-38-113. Rescission of public trustee sale. (1) If the successful bidder at a foreclosure sale is the holder of the evidence of debt foreclosing the deed of trust or other lien, then such successful bidder, the bidder's attorney, the assignee of the successful bidder pursuant to section 38-38-403, or the assignee's attorney may rescind the sale without obtaining a court order by filing with the public trustee no later than eight business days after the date of the sale a notice of rescission of sale stating that the sale is being rescinded, the number and date of the sale, the name of the person to whom the certificate of purchase was issued, the name of the assignee, if any, the reception number or book and page number for the recorded certificate of purchase, and the legal description of the property foreclosed. The notice shall be signed and properly acknowledged by the successful bidder or assignee, or signed by the bidder or assignee's attorney. Upon receipt of the notice of rescission of sale, any assignment of the certificate of purchase, the public trustee's fee for the rescission specified in section 38-37-104, and the costs of recording the notice of rescission of the sale, the public trustee shall record the notice of rescission of sale in the county records.

COMMENTS: 1. “Administrative” rescission is an option open only if the COP went to the holder of the evidence of debt. If the COP went to a third party, the rescission or “sale set-aside” must go through the courts because the third party has an interest. 2. Administrative rescission is also an option only up until the end of the 8th business day after sale. After that, either third parties have an interest by virtue of the filing of one or more NOIR, or title has vested. 3. The Notice of Rescission must include: A. Public trustee’s foreclosure number B. Date of the Sale C. Name of the COP holder (and assignee, if any) D. Recording information for the COP E. Legal description of the property F. Signature and acknowledgment of COP holder (or assignee), or signature of the attorney. 4. You should not process the notice of rescission without having already received payment for the rescission, $100, and the money needed to pay the clerk to record the notice. It probably serves little public purpose, however, to refuse to record the notice of rescission while waiting for payment.

(2) Upon recording of the notice of rescission of sale by the public trustee, the certificate of purchase shall be deemed canceled as if the sale had not occurred, and the evidence of debt and deed of trust shall be deemed fully reinstated with the same lien priority as if the sale had not occurred. The public trustee shall confirm the reinstatement by indorsement on the evidence of debt and deed of trust or copy thereof submitted pursuant to section 38-38-101.

COMMENT: See subsection (7) for wording. The indorsement should be on or attached to the reinstated documents.(3) Within ten calendar days after receipt of all documents and fees and costs specified in subsection (1) of this section, the public trustee shall mail a copy of the notice of rescission of sale to each person who was entitled to receive the combined notice pursuant to section 38-38-103.

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1. While there is no requirement to mail a copy of the recorded notice of rescission as opposed to the unrecorded notice, the 10-day deadline creates an opportunity to have it recorded before mailing. 2. Mail the notice of rescission to the most recent amended mailing list, or if none, to the mailing list.

(4) (a) After the recording of the notice of rescission of sale, the holder of the evidence of debt or the holder's assignee, or the attorney for the holder or the assignee, may notify the public trustee in writing to reschedule the sale. The public trustee shall set a new date of sale at least thirty calendar days but not more than forty-five calendar days after the date on which the public trustee receives notice to schedule a new date of sale, subject to the requirements of section 38-38-109 (2).

COMMENTS: 1. You do not automatically set a new sale date. Setting a new sale date after rescission triggers a $50 fee under 38-37-104(1)(b)(XII). The holder may want to withdraw the sale rather than re-take it to sale. 2. It is usually best to choose a sale date late in the 30-45 day window to give more time for the mailing and publication to occur. The one exception would be if the final sale date under 38-38-109(1)(a) would fall during that window, in which case would need to schedule the sale prior to that expiration. 3. The rescheduled sale date must not be past the one-year deadline of 38-38-109(1)(a), unless it has been extended under 38-38-109(2)(e).

(b) No later than ten calendar days after receiving notice to schedule a new date of sale, the public trustee shall mail a combined notice setting forth the rescheduled date of sale to each person who was entitled to receive the combined notice pursuant to section 38-38-103.

COMMENTS: 1. There is no prohibition against mailing of the new combined notice with the notice of rescission if the timing of mailing is proper. 2. Mail the new combined notice to the most recent amended mailing list, or if none to the mailing list

(c) No later than twenty calendar days after receiving notice to schedule a new date of sale, but no less than ten calendar days prior to the new date of sale, the public trustee shall publish the sale one time only.

COMMENTS: 1. “No later than 20 days” after receiving notice to reschedule sale will always be at least 10 days before sale (sale can be no less than 30 days after the notice). Be careful to meet the requirements of both dates. 2. Mail the notice of rescission to the most recent amended mailing list, or if none to the mailing list.

(d) All fees and costs of the public trustee for actions performed under this section and the cost of recording the notice of rescission of sale shall be part of the foreclosure costs.

COMMENT: Thus, they can be included in a later bid or cure statement.(e) After a sale has been rescinded and rescheduled pursuant to this subsection (4), the sale may be continued in accordance with section 38-38-109 (1) (a).

COMMENT: In the opinion of PTAC legal counsel, this means that the one-year window from the original sale date continues to apply, subject to extension of that period under 38-38-109(2).

(f) If a written request to reschedule the sale is not received by the public trustee within one year of the recording of the notice of rescission, the foreclosure must be withdrawn according to section 38-38-109(3)(b).(5) Nothing in this section shall prevent any person from seeking a rescission of a sale through a court of competent jurisdiction.

COMMENTS: 1. A court-ordered rescission, better known as a “set aside order” to avoid confusion, is also possible. This is required in case of a third-party purchase or once 8 business days have passed since sale. 2. Unless the court specifies a course of action for the public trustee, or references the procedures of this section in the order, the rules for a court-ordered set aside are in 38-38-109(2)(c)(II). You charge the same fees as for a sale held in violation. Do not mail the notice of set-aside and choose a slightly different window for the new sale date (24-49 calendar days)

(6) Claims for damages by any person arising out of a rescission of a sale pursuant to this section shall be limited to the reasonable actual expenses of the person and shall not include any speculative or expectation damages, awards, or claims of any kind, whether legal or equitable.

COMMENT: If a lienor has filed an intent to redeem, it is reasonable to return the $50 fee if a rescission then occurs.(7) The indorsement of the public trustee pursuant to subsection (2) of this section shall be in substantially the following form:The undersigned, as Public Trustee for the county of _______________, state of Colorado, by this indorsement, hereby confirms the reinstatement of this (evidence of debt) (deed of trust) (lien) in accordance with the requirements of section 38-38-113, Colorado Revised Statutes.Date: ____________________Signature: ____________________Public Trustee ____________________For the county of ______________,State of Colorado.

COMMENT: It is unlikely that you will be selecting “lien” from the options, since it is a deed of trust that invokes the statutory powers of the office.

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38-38-114. Unclaimed refunds - disposition under "Unclaimed Property Act".

Moneys payable as a refund for overpayment of a cure of default pursuant to section 38-38-104 or for overpayment of a redemption pursuant to part 3 of this article that remain unclaimed by the owner one year after the moneys became payable are presumed abandoned and shall be reported and paid to the state treasurer in accordance with sections 38-13-110 and 38-13-112.

COMMENT: This presumably applies to any other refund, including refund of an overpayment for a release or the returned balance of a foreclosure deposit.

38-38-201. Foreclosure of installments without acceleration.

(1) Any mortgage or deed of trust securing an evidence of debt payable by installments giving the right to declare the whole indebtedness due and payable on default of the payment of any part thereof may, at the election of the holder of the evidence of debt, be foreclosed as to any one or more past due installments of principal or interest as if the mortgage or deed of trust separately secured each of the past due installments, and, in the event of such election, the officer conducting the foreclosure shall apply the following provisions:(a) Attorney fees allowed for the attorney for the holder of the evidence of debt shall not exceed ten percent of the amount of principal, interest, and late charges included in the bid prepared in accordance with section 38-38-106.(b) Fees and costs allowable under section 38-38-107 may be included in the bid.(c) The amount for which the property is foreclosed shall include past due installments and all sums advanced for fees and costs by the holder of the evidence of debt pursuant to the terms of the mortgage or deed of trust securing the debt.(d) Not more than one foreclosure proceeding may be commenced pursuant to this section in a period of twelve months.(e) The notice of election and demand or complaint filed to commence the foreclosure shall contain the following statement: "This is a foreclosure on one or more installments, without acceleration, as authorized by section 38-38-201, Colorado Revised Statutes."(f) No deficiency bid shall be made by the holder of the evidence of debt or accepted by the officer conducting the foreclosure sale. Upon the sale and the expiration of all redemption periods, the maker of the secured indebtedness and all parties who may be personally liable thereon shall be released from personal liability on the indebtedness, unless the property is redeemed under section 38-38-302.(g) The foreclosure shall not affect the continuance of the lien of the mortgage or deed of trust as to any remaining obligation secured by it but not covered by the foreclosure, whether the remaining obligation is due before or after the foreclosure, and the title acquired as a result of the foreclosure shall be subject to the lien securing the remaining obligation.(2) Nothing in this section shall be construed to prevent the holder of an evidence of debt secured by any mortgage or deed of trust from exercising any option contained therein to declare the whole indebtedness due and payable, nor shall any of the provisions of this section be applicable to a foreclosure in which the whole indebtedness has been declared due and payable.

COMMENTS: 1. Foreclosure by installments is extremely rare. The NED must clearly state, per paragraph (1)(e), that this is the case. 2. If a foreclosure by installments is started, the public trustee should: A. Ensure that no other NED to start a foreclosure by installments on this deed of trust had been started within the prior year. B. Ensure that the attorney fees listed on the bid do not exceed 10% of the principal, interest, and late charges. It seems reasonable that this would apply also the attorney fees on a cure statement, but you will not know what the total of principal, interest, and late charges would be for a cure. C. Ensure that there is no deficiency bid.

38-38-301. Holder of certificate of purchase paying charges - redemption.The holder of a certificate of purchase may pay at any time after the sale and during the redemption period described in section 38-38-302 the fees and costs that the holder may pay pursuant to section 38-38-107 and may include any such amounts as part of the amount to be paid upon redemption.

COMMENTS: 1. PTAC legal counsel takes the position that the legislature intended by use of the term “redemption period” the time period beginning immediately after sale. Note also that this provision does not state that the items to be paid must be accrued after sale, but only that the payment must occur after sale. This would allow payment of such things as accrued property taxes and amounts due on prior liens, if permitted under section 38-38-107. This provision does not allow the inclusion of costs such as doing research on the value or lien position of the property, as that is not allowed under 38-38-107. 2. 38-38-107 spells out the types of fees and costs that may be included in a redemption statement. The most typical fees and costs are accrued interest, property insurance premiums, locking the property to secure it, inspecting the condition of the property, and payment of senior liens. “Maintaining and repairing the property” in 38-38-107(3)(b)(VI) is actually a term defined in 38-38-100.3 (15) as “the act of caring for and preserving a property in its current

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condition or restoring a property to a sound or working condition after damage; except that "maintaining and repairing" shall not include, unless done pursuant to an order entered by a court of competent jurisdiction, any act of advancing a property to a better condition or any act that increases the quality of or adds to the improvements located on a property.” 3. In addition to improvements to a property, other costs that cannot be included in a redemption statement are the cost of obtaining the money used to purchase the property or any amounts paid to acquire a junior lien.

38-38-302. Redemption by lienor - procedure. (1) Requirements for redemption. A lienor or assignee of a lien is entitled to redeem if the following requirements are met to the satisfaction of the officer:

COMMENT: The term “to the satisfaction of the officer” applies to the entitlement to redeem. You can reject an intent to redeem if it fails to comply with any of the following six requirements. More importantly, if you have accepted an intent to redeem and later discover that there is something wrong (most commonly, the lien has been satisfied, the lien was fraudulent, or the judgment was owed by a different person), you can refuse to allow the redemption to occur. In such a case, you would not refund the $50 fee for filing the intent; you have done the work required for that fee and it is the responsibility of the person filing the intent to redeem to ensure that the lien is valid. Notably, this section does not specifically call out the requirement to pay the $50 fee specified in 38-37-104(1)(b)(II), although you are expressly entitled to collect that fee and should do so as a requirement to accept the intent to redeem.

(a) The lienor's lien is a deed of trust or other lien that is created or recognized by state or federal statute or by judgment of a court of competent jurisdiction;

COMMENT: If the lien encumbers a specific property, you should verify that the encumbered property is all or part of the property encumbered by the deed of trust in foreclosure. As long as there is some overlap between the properties, the redemption can occur and will cover the full property according to subsection (9).

(b) The lien is a junior lien as defined in section 38-38-100.3 (11);COMMENTS: 1. The simplest way to verify that the lien is “junior” to the deed of trust in foreclosure is by the recording date and reception number. If the lien was recorded after the deed of trust in foreclosure, it is usually junior. Sometimes, however, there will be subordination language included in the lien (or even the deed of trust) that changes the lien priority. Also there could be a separately-recorded court order or subordination agreement. Since you can’t know what you can’t see, assume the lien priority follows the recording order until someone shows you otherwise. 2. See (f) below for a discussion of how this applies to HOA liens.

(c) The lienor's lien appears by instruments that were duly recorded in the office of the clerk and recorder of the county prior to the recording of the notice of election and demand or lis pendens and the lienor is one of the persons who would be entitled to cure pursuant to section 38-38-104 (1), regardless of whether such lienor filed a notice of intent to cure. If, prior to the date and time of the recording of the notice of election and demand or lis pendens, a lien was recorded in an incorrect county, the holder’s rights under this section shall be valid only if the lien is rerecorded in the correct county at least fifteen calendar days prior to the actual date of sale;

COMMENTS1. If the NED was re-recorded to restart the foreclosure under 38-38-705(1), 38-38-109(2)(b)(II), 38-38-109(2)(d), or 38-38-101(1)(h), it is the re-recording date of the NED that controls whether or not the junior lien has the right to redeem. Re-recording the NED to amend it for partial releases under 38-38-101(9) does NOT change the lien recording deadline. 2. The junior lien must have been recorded prior to the recording of the NED. If the junior lien was recorded in the wrong county prior to the recording of the NED, the lienor will still have a right to redeem if the lien is re-recorded in the correct county at least 15 days prior to the actual sale date. 3. The reference to the lienor having been entitled to cure appears to be a redundancy in the law. Junior lienors do have the right to cure, though they rarely do so. 4. Lien statements for HOA liens are not required to be separately recorded (see (f) below). There likely will be a junior portion of that lien that has a right to redeem.

(d) The lienor has, within eight business days after the sale, filed a notice with the officer of the lienor's intent to redeem. A lienor may file a notice of intent to redeem more than eight business days after sale if:(I) No lienor junior to the lienor seeking to file the late intent to redeem has redeemed;(II) The redemption period for the lienor seeking to file the late intent to redeem has not expired;(III) A redemption period has been created by the timely filing of a notice of intent to redeem; and(IV) The notice of intent to redeem is accompanied by a written authorization from the attorney for the holder of the certificate of purchase according to the records of the officer conducting the sale, or, if no attorney is shown, then the holder of the certificate of purchase, or, if a redemption has occurred, from the immediately prior redeeming lienor, or the attorney for the immediately prior redeeming lienor, authorizing the officer to accept such notice of intent to redeem;

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COMMENTS. 1. The deadline is the end of the 8th business day after sale. This part of the law is not clear if this means the deadline line is midnight of the day that happens to be the 8th business day, or the close of the officer’s 8th business day. PTAC legal counsel is of the opinion that the latter is the more reasonable interpretation. If the intent is emailed, faxed, or slipped under the door after business hours, there is no opportunity for the officer to be “satisfied” that the requirements have been met. There also would be no way to ensure that the $50 payment has been received. Most importantly, however, 38-38-501(1) is clear that if no redemption periods are established, title vests in the holder of the COP “upon the close of the officer’s business day eight business days after sale.” 2. The most important part of the “late intent” is (III) that a redemption period has been established. Using the same argument as in comment 1, if there is no timely intent to redeem filed then title transfers to the COP holder. A late intent would “unvest” title to the property and should not be accepted. 3. Once a redemption has occurred, the COP holder does not have the ability to authorize a new late intent to redeem. That right passes to the holder of the most recently issued COR, but is not permitted if the redemption period for the late filer has expired or any lien junior to the late filing lienor’s lien has redeemed. 4. The timing of redemption periods, as established in 38-38-302(4), is also important. Redemption periods are ordered according to the lien priority. The most senior of the junior liens has the right to redeem during the first redemption period, followed by the next most senior of the junior liens, on down to the most junior of the junior liens having the last redemption period. Suppose that there are three junior liens, but only the two most junior of such liens file a timely intent to redeem. The COP holder could authorize a late filing of an intent to redeem by the most senior of the junior liens, without restriction, until the end of business day 14 after sale (the day prior to the start of the first redemption period) and after that subject to the limitations noted in Comment 3. If that happens, the consequences would be the same as if that lienholder had filed on time. The late-filing lienor would get the right to redeem during the first redemption period, the next lienor would shift to the second redemption period, and a third redemption period would be created for the most junior lienor. Once the first redemption period (by the middle lienor) is in progress, however, the late intent can only be accepted if the middle lienor has not already redeemed. Once that redemption occurs, and the lienor junior to the lienor seeking to file the late intent to redeem has redeemed, the late redemption must be rejected. Even if that middle junior lienor does not redeem, at noon on the 19th business day the first redemption period expires. After that point, the most senior of the junior lienors cannot file a late intent to redeem because the redemption period during which the redemption could have occurred has expired. 5. While the law does not explicitly say so, a late intent also cannot be filed after all redemption periods have expired, even by a lienor who would be more junior than any of the lienors who filed a timely intent to redeem. While that most-junior lienor would not have had a more-junior lienor redeem, and at least during the five business days after the expiration of the last redemption period the redemption period that that most-junior lienor would occupy has also not expired, we still have the problem of transfer of title. Title would have vested in the COP holder or the most recent COR holder “upon the expiration of all redemption periods allowed to all lienors entitled to redeem.” A late intent to redeem allowed after this point would have the same effect as a late intent filed without any timely intents – it would “unvest” title to the property.

(e) The lienor has attached to the notice of intent to redeem the original instrument and any assignment of the lien to the person attempting to redeem, or certified copies thereof, or in the case of a qualified holder, a copy of the instrument evidencing the lien and any assignment of the lien to the person attempting to redeem. If the original instrument is delivered to the officer, the officer shall return the instrument to the lienor and retain a copy.

COMMENTS: 1. The first requirement is for the lien instrument, which must have been recorded under (c) above. A qualified holder needs to provide only a copy of the recorded lien, while other holders must provide either the original or a copy of the lien certified by the county clerk and recorder. 2. There is no requirement for the assignment of the lien to have been recorded. PTAC’s legal counsel takes the position that assignment provided to you must also be an original or certified copy because of the punctuation in this provision and the reference to an instrument in the singular and certified copies in the plural. 3. In the case of an HOA lien, the required lien instrument is the entire recorded declaration of covenants. PTAC legal counsel takes the position that you may accept a separate recorded HOA lien statement referencing the recording information of the recorded declaration as the recorded instrument evidencing the lien. You will still need a copy of the declaration to confirm that the HOA has the right to redeem.

(f) The lienor has attached to the notice of intent to redeem a signed and properly acknowledged statement of the lienor, or a signed statement by the lienor's attorney, setting forth the amount required to redeem the lienor's lien, including per diem interest, through the end of the nineteenth business day after the sale with the same specificity and itemization as required in section 38-38-106. If the amount required to redeem the lienor’s lien shown on the statement is zero, the lienor has no right to redeem unless section 38-38-305 applies.

COMMENTS: 1. A standard form helps with this requirement, in which you roll together the other information you will need to later contact the lienor. This information is the same as what is required by subsection (6) except that at the time of the filing of the intent to redeem, there will be no additional fees and costs.

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2. While the statement should follow the format of 38-38-106, most of the items included there will almost always be omitted as inapplicable. 3. If the lienor’s lien ends up being redeemed, the amount paid to redeem would be what is stated on this form plus additional per diem interest (the lien would be redeemed sometime after the 19th business day after sale) plus the amount paid by the lienor being redeemed to redeem, plus any additional amounts under subsection (6). 4. Section 38-38-305 refers to the holders of recorded easements. They may redeem despite a zero value lien. Sellers under recorded installment land contracts are also lienors. 5. The amount listed in Comment 2 is the amount that would be used to disburse overbid funds under 38-38-111(2). A redemption statement can be amended subject to certain limitations described in subsection 3 below6. There is generally no way to verify the asserted amount due on the lien, which makes it possible that more overbid funds will be distributed to the lienor than should be. Rectifying this situation requires a lawsuit by the interested parties. 7. The tricky part of this paragraph is how it applies to liens from Home Owner Associations (HOAs). These are governed by 38-33.3.316, which in turn references other parts of the Colorado Common Interest Ownership Act. HOAs deviate from the standard lien in the following ways: A. 38-33.3.316(4) says the recorded declaration constitutes record notice and perfection of the lien. It is the lien instrument referenced in subsection (e). A separate lien statement does not need to be recorded at all, and if it was recorded, it does not matter if the lien was recorded prior to the recording of the NED, except that, in the opinion of PTAC counsel, a lien statement recorded prior to recording of the NED may be utilized as the recorded instrument evidencing the HOA lien under subsection (e) if the lien statement was recorded prior to the recording of the NED and the lien statement expressly references the recording information of the declaration. . B. The statutory nature of the HOA lien is based in 38-33.3.316(1) on the recording of a declaration of covenants with the power to levy assessments. Not all HOAs have that power. To determine this, you need to review the recorded declaration of covenants (request or obtain a copy if you accepted a lien statement as the recorded lien instrument under the prior Comment). C. Priorities established by 38-33.3-316 apply so long as both the declaration was recorded prior to the deed of trust being foreclosed and that deed of trust was recorded after June 30, 1992. That statute is silent as to what happens if either of these conditions is not met. Logically, the entire HOA lien will have a priority based on the recording of the declaration if that recording occurs after recording of the deed of trust being foreclosed based on 38-33.3-316(4). If the deed of trust being foreclosed was recorded prior to June 30, 1992, the provisions of CCIOA would not have been in effect. It is recommended that you consult with your attorney if this situation arises. D. Under 38-33.3.316(2)(b), an amount equal to regular assessments due without acceleration during the 6 months immediately before the NED was recorded is considered senior to all deeds of trust. So you need to get from the HOA a statement of the total amount currently due and a statement of what this “super priority” portion would be. Any remainder left when you subtract the “super priority” amount from the total due is what is “junior.” This amount must be greater than zero in order for the HOA lien to have a right to redeem, and this amount is the figure to use for the statement in this subsection (f). E. If the HOA lien does have a right to redeem, under 38-33.3.316(2)(a) the junior portion is junior only to the first deed of trust and therefore senior to all other junior liens. Thus, if it has a junior portion, the HOA lien is always, without exception, assigned the first redemption period as defined in subsection (4)(d). F. 38-38-306(2) applies to an HOA lien because it is a statutory lien. This provision requires that, in the event of redemption of the HOA lien by a more junior lienor, you hold in escrow the redemption amount attributable to the HOA lien claim until final judgment has been entered in favor of the HOA lien claimant confirming the right to a lien and all periods for appeal have expired. At that time you are required to pay the HOA lien claimant from the escrow amount the amount of the lien claimed established by the judgment with any interest earned (not to exceed the total amount you are holding in escrow). The statute states that any balance is to be refunded to the owner of the property as of the date of sale so long as the last redeeming lienor has otherwise been satisfied. This language creates two issues. First, the balance is to be returned to the owner as of the date of sale, rather than as of the date of recording of the NED as under 38-38-111(2). Secondly, the reference to the last redeeming lienor means that is the only person other than the owner to whom these funds are paid. The overbid disbursement procedures of 38-38-111(2) do not apply. This also means you will need to be sure that the court makes the determination of whether the last redeeming lienor has been satisfied. You may be able to accomplish this by conferring with the HOA lien claimant, last redeeming lienor or owner as of the date of sale prior to or at the time the lawsuit is filed. If the claimant releases the lien or fails to establish the right to a lien, the entire escrow is to be paid as described above. If no court action to determine the right to these funds has been commenced within one year after the expiration of all redemption periods, it is recommended that you commence an interpleader action with the district court in your county and deposit the funds into the registry of the court for determination of ownership.

(2) Request for redemption amount. Upon receipt by the officer of the notice of intent to redeem filed by a person entitled to redeem under this section, the officer shall within one business day transmit by mail, facsimile, or other electronic means to the attorney for the

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holder of the certificate of purchase, or if no attorney, then to the holder, a written request for a written or electronic statement of all sums necessary to redeem the sale. The statement shall include the amounts required to redeem in accordance with this section.

COMMENTS 1. When you send the request for a redemption statement, it is helpful to provide a blank form to the holder of the certificate of purchase if you use a form in your county. It is also helpful to remind the holder that the statement must be returned by a specific date (the end of the 13th business day after the sale), and give them the number of calendar days that correspond to the end of the first redemption period (the 19th business day after the sale) for accruing interest. Finally, it is a good idea to remind the COP holder that the vesting of title will not occur until the end of all redemption periods (again, give the date) regardless of whether or not redemption occurs. 2. Although the statutory language is somewhat unclear, PTAC's attorney takes the position that you need not request a redemption statement each time an intent to redeem is filed. While you do not need to request a new statement, the filing of an additional intent to redeem creates an opportunity to advise the holder of the COP that the date of the vesting of tile has been further delayed due to the creation of the additional redemption period.

(3) Statement of redemption. (a) Upon receipt of notice that an intent to redeem was filed, the holder of a certificate of purchase shall submit a signed and acknowledged statement, or the attorney for the holder shall submit a signed statement, to the officer, no later than thirteen business days following the sale, specifying interest calculated through the date of the sale, the amount of per diem interest accruing thereafter, the interest rate on which the amount is based, and all other sums necessary to redeem as of the date of the statement. Interest on the amount for which the property was sold must be charged at the default rate specified in the evidence of debt, deed of trust, or other lien being foreclosed or, if not so specified, at the regular rate specified in the evidence of debt, deed of trust, or other lien being foreclosed. If different interest rates are specified in the evidence of debt, deed of trust, or other lien being foreclosed, the interest rate specified in the evidence of debt prevails. If the evidence of debt does not specify an interest rate, including a default interest rate, the applicable interest rate as specified in the deed of trust or other lien being foreclosed applies. A holder of the certificate of purchase that is not a qualified holder, or the attorney for the holder, shall also submit to the officer receipts, invoices, evidence of electronic account-to-account transfers, or copies of loan servicing computer screens evidencing the fees and costs and verifying that the fees and costs were actually incurred as of the date of sale, along with the per diem amounts that accrue after the date of the statement. The holder or the attorney for the holder may amend the statement from time to time to reflect additional sums advanced as allowed by law, but the statement shall not be amended later than two business days prior to the commencement of the redemption period pursuant to subsection (4)(a) of this section or each subsequent redemption period pursuant to subsection (4)(b) of this section.

COMMENTS 1. This paragraph potentially sends you on a scavenger hunt. The redemption statement must specify “all sums necessary” to redeem, but this paragraph does not define what they are. Instead, you must go to subsection (4) to learn that the junior lienor needs to pay “the sums allowed under section 38-38-301,” which in turn directs you to 38-38-107. 38-38-301 also makes it clear that these fees and costs must be paid after the sale. It may be useful to have a standard form for the COP holder to use for this purpose, such as: Redemption Statement – Certificate of Purchase Holder 2. If the COP holder is not a qualified holder, the redemption statement must be accompanied by receipts, invoices, or the other listed evidence showing the fees and costs. To be useful, these receipts, etc. must have sufficient detail. In other words, a handwritten invoice from a locksmith that lists only an amount due is not exclusive of payment and the carbon copy of a check to an insurance company alone is not evidence that the cost applied to this property. 3. Under 38-38-702(1)(a), you are not required to evaluate the redemption amount stated in the redemption statement for compliance with the law. You could simply pass it on to the junior lienor who can seek recourse under 38-38-302(8). However, you may do so because the documentation must meet the statutory requirements to your satisfaction. For example, you may do the following things and request a corrected redemption statement or modify the statement yourself for the statement to meet the statutory requirements to your satisfaction under subsection (1):A. correct errors in math, including miscalculation of the per diem interest, B. line out claimed Items that are not accompanied by a receipt (etc.), C. line out claimed items that were paid before the sale, and D. line out items that are clearly not allowed under 38-38-107. 4. You may not, however, adjust the amounts claimed because the amounts claimed appear unreasonably high. If the item has a matching receipt or invoice (etc.), then you accept it. The junior lienor can challenge the amount in court under subsection (8). You may, however, remind the person filing the redemption statement that the junior lienor has that option; they may decide to revise the statement on their own. 5. The format of an amended redemption statement should be similar to the original – signed and acknowledged by the holder or signed by the holder’s attorney. The deadline for the amended statement is the same as for the original statement, but this does allow for changes to a statement that was perhaps delivered in haste. If there are multiple redemption periods, this also allows the COP holder to amend the statement for additional fees and costs incurred that would apply to those later redemption periods. 6. We again have the “end of a day” issue. While the intent to redeem is due by the 8th business day after sale, because title vests at the close of the officer’s business day and because of the requirement to receive payment and

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scrutinize the documents, it makes sense to accept only a redemption statement delivered prior to close of business on that day. A written policy defining this will help avoid controversy.

(b) If the holder of the certificate of purchase or the attorney for the holder fails to submit the initial written statement to the officer within thirteen business days after the sale, the officer may calculate the amount necessary to redeem by adding to the successful bid the accrued interest from the sale through the redemption date. The accrued interest shall be calculated by multiplying the amount of the bid by the regular rate of annual interest specified in the evidence of debt, deed of trust, or other lien being foreclosed, divided by three hundred sixty-five and then multiplied by the number of days from the date of sale through the redemption date. The officer shall transmit by mail, facsimile, or other electronic means to the party filing the notice of intent to redeem, promptly upon receipt, the statement filed by the holder, or if no such statement is filed, the officer's estimate of the redemption figure, which shall be transmitted no later than the commencement of the redemption period pursuant to paragraph (a) of subsection (4) of this section or each subsequent redemption period pursuant to paragraph (b) of subsection (4) of this section.

COMMENTS: 1. While this says that the officer “may” calculate the redemption amount in the stated manner, making the calculation is not permissive – you must do this. This specifies an exact method of calculating interest (365-day year and multiplied by the number of days without first rounding the per diem). 2. You must transmit the amount required to redeem no later than the first day of the initial redemption period (business day 15 after sale). If the statement is in hand, or has been calculated, there is no reason to wait until this deadline. Send the redemption amount as soon as it is available. 3. When transmitting the redemption amount to each junior lienor, it is helpful to include in that transmittal: A. the exact dates for the start and end of the redemption period, B. a reminder that payment is due by noon on the final day, C. the additional amount that will need to be paid to the officer for issuing the COR -- $30 under 38-37-104(1)(b)(III), D. the additional amount that will need to be paid to the officer as a pass through for recording the COR under 38-37-104(1)(b)(X) – usually $11, E. a reminder of the types of funds accepted for payment of the redemption amount under 38-37-108 (the $41 for items C and D above need not be in this form), and F. a reminder that the lienor must also provide the certificate of lienor described in subsection (6) if there are other more-junior lienors.

(4) Redemption period. (a) No sooner than fifteen business days nor later than nineteen business days after a sale under this article, the junior lienor having the most senior recorded lien on the sold property or any portion thereof, according to the records, having first complied with the requirements of subsection (1) of this section, may redeem the property sold by paying to the officer, no later than 12 noon on the last day of the lienor's redemption period, in the form specified in section 38-37-108, the amount for which the property was sold with interest from the date of sale, together with all sums allowed under section 38-38-301. Interest on the amount for which the property was sold shall be charged at the default rate specified in the evidence of debt, deed of trust, or other lien being foreclosed or, if not so specified, at the regular rate specified in the evidence of debt, deed of trust, or other lien being foreclosed. If different interest rates are specified in the evidence of debt, deed of trust, or other lien being foreclosed, the interest rate specified in the evidence of debt shall prevail. If the evidence of debt does not specify an interest rate, including a default interest rate, applicable interest rate as specified in the deed of trust or other lien being foreclosed shall apply.

COMMENTS: 1. This fairly clearly spells out the information that is required under subsection (3). 2. The first redemption period ends at noon on the 19th business day after sale, This allows the officer to process and transmit the certificate of lienor (subsection (6)) to the next junior lienor before the start of the next redemption period. A written policy reflecting this will help avoid controversy. 3. The wording of the law makes it clear that the lienor need only pay interest through the date of the redemption payment. The lienor is not required to pay the full amount that is on the redemption statement, but rather may back out the per diem amounts from the total shown, which is valid through the 19th business day. 4. There is no possibility of redeeming early or late.

(b) (I) Each subsequent lienor entitled to redeem shall, in succession, have an additional period of five business days to redeem. The right to redeem shall be in priority of such liens according to the records. The redeeming lienor shall redeem by paying to the officer, on or before 12 noon of the last day of the lienor's redemption period:(A) The redemption amount paid by the prior redeeming lienor, with interest at the rate specified in paragraph (a) of this subsection (4), plus the amount claimed in the statement delivered by the immediately prior redeeming lienor pursuant to subsection (6) of this section, including the per diem amounts through the date on which the payment is made; or(B) If no prior lienor has redeemed, the redemption amount determined pursuant to paragraph (a) of this subsection (4).

COMMENTS 1. The second redemption period starts on the 20th business day after sale and ends at noon on the 24th business day after sale. There is no limit to the number of redemption periods allowed. 2. If no prior lienor has redeemed, the redemption statement (as possibly amended) stands. You have already sent this amount to each junior lienor. The amount due, however, will increase from the amount on the redemption

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statement, since additional per diem interest will be accruing. It would be appropriate to use the window of time between the close of the prior redemption period at noon and the start of the next redemption period the next day to let the junior lienor know that they will base their redemption payment on the redemption statement as adjusted for the additional interest. 3. If a prior lienor has redeemed, then the next lienor will redeem based on the certificate of lienor described in subsection (6), again paying only the per diem interest through the date of redemption.

(II) If the redeeming lienor is the same person as the holder of the certificate of purchase or the prior redeeming lienor as evidenced by the instruments referred to in subsection (1) of this section, regardless of the number of consecutive liens held by the redeeming lienor, the redeeming lienor shall not pay to the officer the redemption amount indicated in the certificate of purchase or certificate of redemption held by such person, but shall only pay to the officer the unpaid fees and costs required by the redemption and provide the statement described in paragraph (f) of subsection (1) of this section.

COMMENTS .1. The language of this provision is somewhat unclear. If a “serial” redeeming lienor were required to provide only the initial lien statement required by 302(1)(f), then potentially a more junior lienor would not be required to pay the amount of such lien because under 302(b)(I)(A), the amount required to be paid by a junior lienor is based on the lien certificate of the prior redeeming lienor filed pursuant to subsection (6). This is clearly not the intent of the provision, therefore a lienor certificate under subsection (6) should be filed and only the requirement to pay the amount required to redeem in subsection (6) should be modified by this provision. In turn, a more junior lienor is required to pay the amount of the lien of the serial redeeming lienor. 2. The purpose of this provision is to avoid having a lienor pay money to the officer as part of a redemption that is guaranteed to be returned to the lienor almost immediately as proceeds of the redemption. This is purely to the advantage of a lienor holding or acquiring multiple liens, while making the officer’s process more complicated. The lienor need only pay the $30 fee for issuing the Certificate of Redemption and the cost of recording that certificate. The certificate should, however, reflect the amount owed on the lienor’s statement, and that full amount would need to be paid by a subsequent redeeming lienor.

(c) If the statement described in paragraph (f) of subsection (1) of this section so states, or upon other written authorization from the holder of the certificate of purchase or the then-current holder of the certificate of redemption or the attorney for either such holder, the officer may accept as a full redemption an amount less than the amount specified in paragraph (a) of subsection (3) of this section. Notwithstanding the first sentence of this paragraph (c), the amount bid at sale shall determine the amount and extent of any deficiency remaining on the debt represented by the evidence of debt that is the subject of the foreclosure as stated in the bid pursuant to section 38-38-106 (2). Any redemption under this section shall constitute a full redemption and shall be deemed to be payment of all sums to which the holder of the certificate of purchase is entitled.

COMMENTS 1. It is very unusual for the holder of a COP or COR to accept less than they are allowed in a redemption. Even if the deadline for amending the certificate of redemption or certificate of lienor has passed, the holder can always reduce the amount claimed. The deadlines apply only to increasing the amount claimed. 2. If this happens, we treat the redemption as a normal redemption and do not need to amend a deficiency bid or change the amount of overbid funds calculated. 3. In this situation, the holder who accepted the redemption for less than could have been claimed waives any rights to overbid proceeds under 38-38-111(2).

(d) On the ninth business day after the date of sale, the officer shall set the dates of the redemption period of each lienor in accordance with this subsection (4). The redemption period of a lienor shall not be shortened or altered by the fact that a prior lienor redeemed before the expiration of his or her redemption period.

COMMENTS 1. Once the deadline for filing a timely intent to redeem has passed, notify the junior lienors who have filed intents to redeem what their redemption period is in lien priority order as described under 38-38-302(4)(b)(I). A home owner’s association lien is always in the first junior lienor redemption period. 2. If a late intent to redeem is filed that alters the redemption periods, advise the junior lienors of this fact. 3. The redemption period does not end when a junior lienor redeems. If the first junior lienor redeems on the first day of the redemption period, it does not change the time for vesting of title or any subsequent redemption period.

(5) Certificate of redemption. Upon receipt of the redemption payment pursuant to subsection (4) of this section, the officer shall execute and record a certificate of redemption pursuant to section 38-38-402. Upon the expiration of each redemption period under this section, the officer shall disburse all redemption proceeds to the persons entitled to receive them.

COMMENTS 1. 38-38-402 says the COR should be issued and recorded no later than five business days following the receipt of the redemption payment, so “upon receipt” should be interpreted to mean within that period. 2. The PTAC attorney has advised us to not pay out funds until final settlement of the payment irrevocably crediting the funds to our account has occurred. Even though the funds are “certified,” there are ways of stopping payment, and there is also the possibility of forgery. The attorney has advised in any case not disbursing check proceeds until at least the 4th business day after receipt. That would fall within the 38-38-402 timeframe.

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3. Do not issue the confirmation deed under 38-38-501 until the COR has been recorded.4. Waiting to record the COR until after funds have cleared might seem inconsistent with a policy of recording the COP more promptly. The difference is that if “bad” funds were offered during redemption, then no redemption occurred at all – but there is no administrative way to void the COR. On the other hand, if funds tendered at sale turn out to be “bad,” you have much the same situation as if you allowed the sale payment to be made later in the day but the 3rd party bidder fails to make the payment: you must roll back the bidding to determine who should receive the property, but a sale has in fact occurred. Then the COP could be corrected using a scrivener’s error affidavit under 38-38-705(2). In addition, while a confirmation deed could be issued immediately upon recording of the COR, leaving us with two recorded documents that should be voided, the confirmation deed will not be recorded until at least 9 business days after the sale occurs, which in most cases will be sufficient time to ensure that the funds were accepted.

(6) Certificate of lienor. A redeeming lienor shall pay to the officer the amount required to redeem and shall deliver to the officer a signed and properly acknowledged statement by the lienor or a signed statement by the lienor's attorney showing the amount owing on such lien, including per diem interest and fees and costs actually incurred that are permitted by subsection (7) of this section and for which the lienor has submitted to the officer receipts, invoices, evidence of electronic account-to-account transfers, or copies of loan servicing computer screens evidencing the fees and costs and verifying that the fees and costs were actually incurred as of the date of the statement of redemption with the per diem amounts that accrue thereafter. At any time before the expiration of a redeeming lienor's redemption period, the redeeming lienor may submit a revised or corrected certificate, or the attorney for the lienor may submit a revised or corrected statement.

COMMENTS 1. If there is no subsequent lienor, then the certificate of lienor serves no purpose except disbursement of overbid funds. Once the redemption has been made, only the lienor who redeemed could authorize an additional redemption period under subsection (d). The certificate of lienor could be provided if that happens. 2. The certificate of lienor will include the amount paid to redeem (including the officer’s fees), the lien amount that was provided with the intent to redeem under paragraph (1)(f), additional accrued interest, and additional fees and costs that could be claimed. 3. There is no explicit penalty for failure to provide the certificate of lienor. It has the same “shall” language as the similar redemption statement; the penalty for failure of the COP holder to provide the redemption statement is simply that the public trustee calculates the amount due without the fees and costs. It doesn’t seem as if any more severe penalty would be warranted for this case. Theoretically a junior lienor might not be required to pay the lien amount of a junior lienor not filing a certificate of redemption because of the reference to subsection (6) in paragraph 302(b)(I)(A), but the attorney for PTAC is of the opinion that you should utilize the junior lienor lien statement required under 302(1)(f) to determine the amount of a lienor’s lien for purposes of redemption by a more junior lienor if the lienor being redeemed has not filed a certificate of redemption under subsection (6).

(7) Payment of fees and costs. A redeeming lienor may, during such lienor's redemption period described in subsection (4) of this section, pay the fees and costs that the holder of the evidence of debt may pay pursuant to section 38-38-107.

COMMENTS 1. The intent here appears to be to apply the same rules for the certificate of lienor as apply for the redemption statement under paragraph (3)(a), which are better described in paragraph (4)(a) and point to 38-38-301 and then in turn to 38-38-107. The most notable exclusion from the allowable fees and costs would be the cost of purchasing the lien that was used to redeem.

(8) Misstatement of redemption amount. If an aggrieved person contests the amount set forth in the statement filed by a redeeming lienor pursuant to paragraph (f) of subsection (1) of this section or by a holder of a certificate of purchase pursuant to paragraph (a) of subsection (3) of this section and a court determines that the redeeming lienor or holder of the certificate of purchase has made a material misstatement on the statement with respect to the amount due and owing to the redeeming lienor or the holder of the certificate of purchase, the court shall, in addition to other relief, award to the aggrieved person the aggrieved person's court costs and reasonable attorney fees and costs.

COMMENTS 1. Recalling the comment made under paragraph (3)(a) and the guidance of 38-38-702(1)(a): you are not obligated to challenge even obvious problems with the redemption statement. Even if you do, you have no way of knowing if the amounts claimed are legitimate. This determination will be left to the courts, with the severe penalty for the person who filed the misstatement of paying the other party’s costs. This may deter inflation of a redemption amount and encourage amendment of the redemption statement. 2. Even if the aggrieved junior lienor wants to challenge the redemption amount, they must redeem during the redemption period for the amount stated or obtain a court order that would enjoin, extend or re-open a redemption period until the case is resolved. Once the redemption period expires, there is no further opportunity to redeem.

(9) No partial redemption. A lienor holding a lien on less than all of, or a partial interest in, the property sold at sale shall redeem the entire property. No partial redemption shall be permitted under this part 3. The priority of liens for purposes of this section shall be determined without consideration of the fact that the lien relates to only a portion of the property or to a partial interest therein.

COMMENTS

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1. This is reasonably self-explanatory. If you foreclosed on lots 1 and 2, the holder of the junior lien on lot 1 may redeem and thus become the COR holder for both lots. The holder of the junior lien on lot 2 that was recorded after the junior lien on lot 1 may redeem next and would thus become the new COR holder for both lots. 2. While the law does not spell it out, presumably the distribution of overbid funds in 38-38-111 would follow the same principle. You would not divide up the overbid in some fashion among the holders of liens covering different parts of the property.

(10) Federal redemption rights. Any redemption rights granted under federal law are separate and distinct from the redemption rights granted under this part 3. All liens that are junior to the deed of trust or other lien being foreclosed pursuant to this article shall be divested by the sale under this article, subject to the redemption rights provided in this part 3. The officer conducting a foreclosure under this article is not designated to receive redemptions under federal law.

COMMENT: If a federal lien was recorded and meets the criteria described in subsection (1), the lienor may redeem under Colorado law using the rules of this section. There are also federal procedures and timetables that that lienor may follow, but we don’t administer them.

38-38-304. Effect of redemption. (1) and (2) (Deleted by amendment, L. 2006, p. 1471, § 22; L. 2007, p. 1849, § 27, effective January 1, 2008.)(3) If redemption is made by a lienor, the certificate of redemption, duly recorded, operates as an assignment to the lienor of the estate and interest acquired by the purchaser at the sale, subject to the rights of omitted parties as defined in section 38-38-506 (1) and persons who may be entitled subsequently to redeem.

COMMENT: Once the redemption is made, the COP holder loses the right to the property in favor of the COR holder. Just as with the COP holder, the COR holder is subject to later redemption or the possibility of omitted party claims.

38-38-305. Lessee, easement holder, and installment land contract vendor considered as lienors - installment land contract vendee

considered as an owner - repeal. (1) For the purposes of this article, a lessee of, or the holder of an easement encumbering, property shall be considered as a lienor, but without any lien amount, and shall be subject to all requirements in this article with respect to lienors. If a subsequent lienor redeems from the redemption of a lessee or easement holder, such subsequent lienor in acquiring said property takes the same subject to such lease or easement.

COMMENT: A lessee or easement holder may redeem if they comply with the rest of this section – in particular, having recorded the interest prior to the recording of the NED. These are the only cases in which redemption may occur with a lien value of $0.

(1.5) (a) The notice to the lessee or lessees who have unrecorded possessory interests in the property being foreclosed as provided for by this article and article 37 of this title by virtue of any foreclosure of a mortgage, trust deed, or other lien or by virtue of an execution and levy shall be mailed to the lessee or lessees of a single-family residence or a multiple-unit residential dwelling. Such notice shall be in writing and shall be sent by regular mail. Notice is complete upon mailing to the lessee at the address of the premises or by addressing such notice to "Occupant" followed by the address.(b) Nothing in this section shall affect any rights under this article of a lessee whose residential lease is recorded.

COMMENT: The mailing list, 38-38-100.3(13)(c,) used for the combined notices, 38-38-103, includes “occupant” to cover these unrecorded interests. Unrecorded interests do not have a right of redemption.

(2) For the purposes of this article, an installment land contract vendor of property shall be considered as a lienor for the unpaid portion of the purchase price, interest, and other amounts provided under the installment land contract and shall be subject to all requirements in this article with respect to lienors; but such installment land contract vendor shall not be considered as an owner as to any portion of such property.

COMMENT: The party selling property under a recorded installment land contract, 38-35-126, is a lienor with the right to redeem.

(3) For the purposes of this article, an installment land contract vendee of property shall be considered as an owner except as to any portion of such property that such vendee may thereafter have transferred, as evidenced by a recorded instrument, and such vendee shall be subject to all requirements in this article with respect to owners.

COMMENT: The party buying property under an installment land contract, 38-35-126, is an owner and as such has a right to cure if the contract is prior to recording of the NED and does not have a right to redeem.

38-38-306. Rights of other lienors to redeem.

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(1) A judgment creditor whose judgment has been made a lien of record and who has complied with the other conditions of a lienor required by this article may redeem as a lienor.

COMMENT: A judgment lien applies to all property owed by the party the lien is against. It generally will not have any legal description of such property. There is some risk therefore that such a lien presented as part of the intent to redeem may, in fact, be against a different party with a similar name. You cannot easily determine whether or not this is the case, but this may be raised by the COP or COR holder who would be redeemed.

(2) A mechanic's lien claimant or any other person claiming the right to a statutory lien on real property shall have the right to redeem as a lienor despite the fact that the claim has not been reduced to judgment, if the lien or lien claim has been recorded as required or permitted by statute and the holder thereof has complied with the other conditions required of a lienor by this article. If another lienor redeems after such lien claimant, that portion of the redemption amount attributable to the claim of such lien claimant, as evidenced by such claimant's recorded lien, shall be held in escrow by the officer until a final judgment has been entered in favor of such claimant confirming the claimant's right to a lien and all periods for appeal have expired, whereupon there shall be paid to such claimant from the escrow the amount of the lien claim as established by the judgment, with any interest earned thereon, and the balance, if any, shall be refunded to the owner of the property as of the date of the sale, so long as the last redeeming lienor has otherwise been satisfied. If the claimant releases the lien or fails to establish a right to the lien, the entire escrow shall be paid to the owner of the property as of the date of the sale, so long as the last redeeming lienor has otherwise been satisfied. Lien claimants of equal priority, for the purposes of this subsection (2), may act in concert and be deemed to represent one claim in which they share pro rata. The right of the owner of the property as of the date of the sale to excess sale proceeds pursuant to a homestead exemption under section 38-41-201 is subordinate to the right of a subsequent deed of trust beneficiary for whose benefit the owner waived the homestead exemption.

COMMENTS: 1. A mechanic’s lien may be used to redeem (as long as it meets the other criteria) even if the lien has not yet been reduced to judgment, and the redemption is effective even if the lien is later reduced or denied by the courts. 2. If the mechanic’s lien is redeemed by a more junior lienor, you would distribute to the mechanic’s lienor only the portion of the proceeds that account for what the mechanic’s lienor paid to redeem. You will hold in escrow the portion of the redemption payment that is attributable to the claim made by the mechanic’s lien holder until the courts enter a judgment determining whether and in what amount the lien is valid and time for all appeals has expired. 3. If the full lien is granted by the courts, you pay the full amount of the escrowed redemption payment to the lien holder plus interest. Interest is paid at the rate earned by the officer on the amount escrowed. 4. If the lien is reduced to an amount less than was claimed by the lien holder, and thus less than the amount paid to redeem by the more junior lienor, then you pay the mechanic’s lien claimant only the amount granted by the court, again plus interest. If the lien is denied, you pay nothing to that claimant from the escrow amount. 5. Disbursement of funds in the case of a mechanic’s lien (or the junior portion of an HOA lien) claim denied or reduced to an amount by a judgment differs in two significant ways from the distribution of overbid funds under 38-38-111(2). First, the only lienor to whom funds remaining because of denial or reduction of the lien claim amount are disbursed is the last redeeming lienor. This makes sense because the funds in escrow were paid in turn by each junior lienor redeeming behind the mechanic’s lien claimant, so the only one of the them who would not have been reimbursed for that amount would be the last redeeming lienor. If escrow funds remain after the lien of the last redeeming lienor has been satisfied, they are paid to the owner of the foreclosed property as of the date of sale, rather than as of the date of recording of the NED under 38-38-111(2). Funds might be available for the owner, for example, where a mechanic’s lien claim is denied in full and the amount of the funds escrowed with the public trustee exceeds the amount of the lien claim of the last redeeming lienor.

38-38-401. Certificate of purchase - issuance. (1) No later than five business days after the sale, the officer shall execute and record in each county where the property or a portion thereof is located a certificate of purchase containing:(a) The names of the original grantors of the deed of trust being foreclosed;(a.5) The description of the property;(b) The sum paid for the property;(c) The name and address of the purchaser;(d) A statement that the purchaser or assignee of the certificate of purchase shall be entitled to a confirmation deed at the expiration of all redemption periods provided under part 3 of this article unless a redemption is made;(e) The deficiency under the evidence of debt, if any, as a result of the successful bid at sale;(f) The public trustee's sale number or, in the case of a sale by the sheriff, the district court civil action number;(g) The date of sale;(h) An attached exhibit containing a copy of the executed order authorizing the sale that bears the public trustee sale number or civil docket number in the case of a judicial foreclosure; and(i) An attached exhibit containing a copy of the mailing list and all amended mailing lists bearing the public trustee sale number or civil docket number in the case of a judicial foreclosure.

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COMMENTS: 1. Although you are permitted to wait a week to record the COP, there is no particularly good reason to wait. Delay hinders the ability of the holder to rescind the sale, as 38-38-113(1) requires the reception number of the COP be included on the notice of rescinded sale. In the unlikely even that the funds used as payment fail to clear the bank, the sale would presumably roll back to the holder of the evidence of debt and you could use an affidavit of scrivener’s error under 38-38-705(1) and 38-35-109(5)(d) to correct the certificate. Another alternative would be to promptly record certificates for property bought by the holder of the evidence of debt and hold the certificates for property bought by 3rd parties until the funds clear. 2. The “description of the property” in paragraph (a.5) is the legal description used on the NED, 38-38-101(4)(g)

(2) The officer shall retain the recorded certificate of purchase in the officer's records.COMMENT: If you record a paper document, keep the original, otherwise the recorded electronic copy is sufficient.

(3) The failure of the officer to comply with the provisions of this section shall not affect the validity of the sale or the vesting of title in the name of the holder of the certificate of purchase or certificate of redemption

COMMENT: The confirmation deed is valid even if the COP was not issued and recorded, but this is not license to not do the work. This subsection is intended to address accidental or unintended failure to complete this task correctly.

38-38-401.5. Certificate - priority of lien.The lien represented by a certificate of purchase shall have the same priority as the deed of trust or other lien foreclosed.

COMMENT: For lien purposes, the COP replaces the deed of trust. This presumably is in the law to avoid some claim that the COP has a lien priority equal to its own recording date and thus, is junior to all other liens.

38-38-402. Certificate of redemption - issuance.

(1) No sooner than fifteen business days following a sale but no later than five business days following an officer's receipt of redemption money paid under section 38-38-302, the officer shall execute and record in each county where the property or a portion thereof is located a certificate of redemption containing:(a) The names of the original grantors of the deed of trust being foreclosed;(a.5) The name and address of the person redeeming;(b) The redemption amount paid;(c) The date of sale;(d) The description of the property rmed; and(e) The public trustee's sale number or, in the case of a sale by the sheriff, the district court civil action number.

COMMENTS: 1. This section allows the officer to wait for clearance of the funds used to redeem prior to issuing and recording the COR. This is advisable, unlike with the COP in 38-38-401(1), because if the funds do not clear then no redemption occurred. Note the funds may not finally clear within this time period and you should be certain funds have finally cleared before acting. 2. The “description of the property” in paragraph (d) is the legal description used on the NED, 38-38-101(4)(g).

(2) The officer shall retain the recorded certificate of redemption in the officer's records.COMMENT: If you record a paper document, keep the original, otherwise the recorded electronic copy is sufficient.

(3) The failure of the officer to comply with the provisions of this section shall not affect the validity of the sale or the rights of the grantee of the confirmation deed.

COMMENT: The confirmation deed is valid even if the COR was not issued and recorded. But this is not license to not do the work, especially if you have received payment for it. This subsection is intended to address accidental or unintended failure to complete this task correctly.

38-38-403. Certificates assignable. (1) Every certificate of purchase or certificate of redemption that is issued to any person under this part 4 shall be assignable by indorsement thereon or by separate assignment, and the assignee shall be treated for all purposes as the original holder of the certificate of purchase or certificate of redemption. A separate assignment of a certificate of purchase or a certificate of redemption shall contain:(a) The name and address of the assignee;(b) The name and address of the assignor;(c) A description of the property;(d) The name of the foreclosing holder of the evidence of debt; and

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(e) The number of the foreclosure sale held by the public trustee or the case number of the judicial foreclosure.COMMENTS: 1. The assignment is not required to be recorded, and the signature of the assignor (assumed to be required, though not specified) need not be acknowledged. The assignment is only valid for the purpose of issuing a confirmation deed under 38-38-501(2) if it is signed, dated and acknowledged or recorded prior to the vesting of title and is received by you within 10 business days after title vests. Once title vests, ownership of the property must be transferred by the party to whom you issue your confirmation deed using another document, such as a quit claim deed. However, because we do not give legal advice and this activity happens outside of the realm of the public trustee, we leave that process up to the parties involved. 2.). Because of the possibility of receiving an assignment on the 10th business day after title vests, it is recommended that you not under any circumstances issue your confirmation deed before 11 business days after title vests. 3. If you issued a confirmation deed on the 10th business day after sale and received a proper assignment later that same day, you could record a scrivener’s error affidavit under 38-38-705(2) to address that error. 4. If you are going to issue a confirmation deed to an assignee and the assignment was not recorded, you should attach a copy of the assignment to the deed at the time of recording so the real estate records will reflect why your deed was not issued to the certificate holder. If the assignment was recorded, you can either attach a copy of the recorded assignment to your confirmation deed or reference the assignment and its recording information in your confirmation deed. 5. The “description of the property” in paragraph (c) is the legal description used on the NED, 38-38-101(4)(g).

38-38-405. Certificate as prima facie evidence.A certificate of purchase, certificate of redemption, confirmation deed, or a certified copy thereof shall be deemed to be prima facie evidence of all statements or recitals contained therein.COMMENT: In other words, these documents are enough to establish the facts of the foreclosure sale in the absence of some challenge to it. If they have not been issued, the facts of the foreclosure would need to be established via the testimony or affidavit of the public trustee. This section is comparable to 38-38-504 concerning deeds.

38-38-501. Title vests upon expiration of redemption periods - confirmation deed.(1) Upon the expiration of all redemption periods allowed to all lienors entitled to redeem under part 3 of this article or, if there are no redemption periods, upon the close of the officer's business day eight business days after the sale, title to the property sold shall vest in the holder of the certificate of purchase or in the holder of the last certificate of redemption in the case of redemption. Subject to the right to cure and the right to redeem provisions of section 38-38-506 and subject to the provisions of section 38-41-212 (2), such title shall be free and clear of all liens and encumbrances junior to the lien foreclosed. No earlier than ten business days nor later than fifteen business days after both the title vests and the officer has received all statutory fees and costs, the officer shall execute and record a confirmation deed pursuant to section 38-38-502 or 38-38-503 to the holder of the certificate of purchase or, in the case of redemption, to the holder of the last certificate of redemption confirming the transfer of title to the property; except that the officer shall execute and record a confirmation deed prior to the tenth business day after title vests, if the officer has received all statutory fees and costs and notice from the appropriate holder that the certificate will not be assigned. But under no circumstances shall the officer be required to issue a confirmation deed unless the office has received an order authorizing the sale that meets the requirements of section 38-38-105 (2) (a). Failure of the officer to execute and record such deed or to record the deed within the time specified shall not affect the validity of the deed or the vesting of title.

COMMENTS: 1. Title vests in the certificate holder either: A. At the end of “all redemption periods allowed to all lienors entitled to redeem.” Although not explicit, the wording suggests this to be noon on the final day of the final redemption period. B. “Upon the close of the officer’s business day 8 business days after sale.” This fairly clearly establishes that when the officer locks to door that day, title vests if no redemption period was established. Thus an intent to redeem filed under 38-38-302(1) must be received by the close of business on that day or title vests. 2. The transfer of title extinguishes junior liens other than those held by omitted parties and homestead rights. Although not mentioned, certain federal liens may also survive the transfer of title. 38-38-302(10) says that we don’t need to worry about those liens. 3. We do not issue a confirmation deed until title has vested, we do not issue a confirmation deed if we have discovered after sale that we did not have an order authorizing sale, and we do not issue a confirmation deed if we have not received payment as specified in this section. Under current law, this payment should have been included in the fees and costs for sale included in the bid under 38-38-106(2); under the old law this payment may be separate,

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but it is likely that most holders will want to include the cost of the deed ($35) and its recording ($11 plus $5 for any additional pages) as part of their bids. 4. We may issue a confirmation deed any time after title vests upon the request of the certificate holder, who also gives notice (which should be in writing) that the certificate has not been and will not be assigned. This certification does not need to be signed – email will suffice. Otherwise it is recommended you wait until the 11 th business day after sale. See Comment 5.. 5. Under the old law, which applies to notices of election and demand recorded prior to 9/1/12, a confirmation deed may only be issued upon request. Some certificate holders would delay the request for a deed for a long time, disguising the actual property ownership. Since the “failure” to issue a deed did not affect title, some certificate owners would sell the property to another party without ever requesting a confirmation deed. The new law, which applies to notices of election and demand recorded after 9/1/12, eliminates these problems by directing the officer to issue and record the confirmation deed between the 10th and 15th business day after title vests. Since subsection (2) allows an assignment to be delivered on the 10th business day after title vests, it would be good policy to wait until the 11th business day before automatically issuing the confirmation deed. 6. If you fail to issue and record the confirmation deed by the end of the 15 th business day, 38-37-110 stipulates that the public trustee must forfeit 5% of the fee per day. This would be $1.50 per day, calendar day since it is unspecified, to be returned the person paying, which via a series of passed-through costs is the certificate holder who will get the deed. That section actually refers to forfeiting 5% of the withdrawal fee for failure to issue the deed, but this must be a typo or a failure to update the section’s reference when some other part of the law was updated. 7. While the law does not say so explicitly, pending the vesting of title, title remains with the owner of record

(2) Notwithstanding any provision of law to the contrary, an officer may not include an assignee as a grantee in a confirmation deed, unless:(a) The officer has received a copy of the assignment executed in accordance with section 38-38-403 within ten business days after title vests; and (b) The assignment was dated, signed, and notarized or recorded prior to the time title vests.

COMMENTS: 1. On the 10th business day after title vests, you may issue the confirmation deed. “Within ten business days” means that the assignment could be delivered on that same 10th business day. A good practice would be to wait until the 11th

business day after title vests before issuing the confirmation deed, unless you receive the notice of no assignment from the certificate holder. 2. The assignment of the certificate under 38-38-403 must occur before title vests under subsection (1). The way you know this to be true is if the document is dated, signed and notarized (acknowledged) or recorded prior to the vesting of title . Even though 38-38-403 does not require a certificate assignment to be notarized or recorded, if you receive an un-notarized and un-recorded , do not accept it because of the language of (2)(b). If title has not yet vested, the assignees could record it, otherwise, issue the confirmation deed to the certificate holder, and the new owner can use a quit claim deed to transfer ownership. 3. This subsection was added in 2012, but the basic guidance applies to foreclosures under the old law for notices of election and demand recorded prior to 9/1/12. A certificate may not be assigned after title vests, so if you receive an assignment you must be able to verify that the assignment occurred before title vests. The only difference that applies to the old law would be that you may accept the copy of the assignment at any time up and until the certificate holder’s request for the confirmation deed. You do not at any time automatically issue the confirmation deed under the old law.

38-38-502. Form of confirmation deed for public trustee's sale.

The confirmation deed executed by the public trustee in a foreclosure sale may be in substantially the following form:THIS DEED is made , 20 , between as the public trustee of the County of , Colorado, and , grantee, (the holder of the certificate of purchase) (the holder of the certificate of redemption issued to the lienor last redeeming), whose legal address is .WHEREAS, did, by deed of trust dated , 20 , and recorded in the office of the clerk and recorder of the County of , Colorado, on , 20 , in Book , Page , (Film no. , Reception no. ) convey to the public trustee, in trust, the property hereinafter described to secure the payment of the indebtedness provided in said deed of trust; andWHEREAS, a violation was made in certain of the terms and covenants of said deed of trust as shown by the notice of election and demand for sale filed with the public trustee; the said property was advertised for public sale at the place and in the manner provided by law and by said deed of trust; combined notice of sale and right to cure and redeem was given as required by law; said property was sold according to said combined notice; and a certificate of purchase thereof was made and recorded in the office of said county clerk and recorder; andWHEREAS, all periods of redemption have expired.NOW, THEREFORE, the public trustee, pursuant to the power and authority vested by law and by the said deed of trust, confirms the foreclosure sale and sells and conveys to grantee the following described property located in the County of , State of Colorado, to-wit:

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(describe property)also known by street and number as to have and to hold the same, with all appurtenances, forever.

38-38-503. Form of confirmation deed for sheriff's sale.The confirmation deed executed by the sheriff in case of a sale by virtue of an execution and levy or judgment and decree shall state the judgment under which the property described was sold and the execution or decree date and may be in substantially the following form:THIS DEED is made , 20 , between as sheriff of the County of , Colorado, and , grantee, (the holder of the certificate of purchase) (the holder of the certificate of redemption issued to the lienor last redeeming), whose legal address is .WHEREAS, did, in the court for and County of , Colorado, (recover a judgment against for the sum of dollars and costs of suit and upon which judgment an execution was issued) (obtain a judgment and decree against ) dated , 20 , directed to the sheriff of the County of , Colorado; andWHEREAS, by virtue of said (execution) (judgment and decree), the sheriff levied upon the property hereinafter described and, after public notice had been given of the time and place of sale as required by law, said property was offered for sale and sold according to said notice, and a certificate of purchase was made and recorded in the office of the county clerk and recorder; andWHEREAS, all periods of redemption have expired.NOW, THEREFORE, I, , sheriff of the County of , Colorado, in consideration of the premises, confirm the sale and sell and convey to grantee the following described property, located in the County of , Colorado:(describe property)also known by street and number as .TO HAVE AND TO HOLD the same, with all appurtenances thereunto, forever.

38-38-504. Deed evidence of compliance.

Any deed executed by an officer or other official under this article shall be prima facie evidence of compliance with all statutory requirements for the sale and execution of the deed and evidence of the truth of the recitals contained in the deed.

COMMENTS: In other words, the confirmation deed is enough to establish the facts of the foreclosure sale in the absence of some challenge to it. If no deed has been issued, the facts of the foreclosure would need to be established via the testimony or affidavit of the public trustee. This section is comparable to 38-38-405 for certificates.

38-38-505. Effect of foreclosures as to certain classes of persons.

(1) All deeds of trust executed to a public trustee may be foreclosed by such public trustee in the manner provided by section 38-38-101, notwithstanding the fact that the indebtedness secured may constitute a claim against the estate of a deceased person, a mental incompetent, or an incapacitated person and notwithstanding the death, mental incompetency, or incapacity of one or more of the owners of the property covered by the deed of trust.

COMMENT: In most cases, neither the public trustee nor the holder will be aware of these situations, but none of them block a foreclosure of the property.

(2) Any such foreclosure shall be good against a mental incompetent or incapacitated person and against the heirs-at-law, legatees, devisees, creditors, conservators, guardians, personal representatives, executors, and administrators of any decedent or mental incompetent or incapacitated person and all persons claiming by, through, or under such decedent or mental incompetent or incapacitated person. The public trustee shall give notice of such foreclosure proceedings, as provided by law, to the grantor in the deed of trust foreclosed at the address stated therein, as though living and mentally competent, to all persons having interests then of record, and to the lessee or lessees of the premises as provided in section 38-38-305 (1.5). The public trustee shall not be required to give notice of such foreclosure proceedings to any heir-at-law, legatee, devisee, creditor, conservator, guardian, personal representative, executor, or administrator of any decedent or mental incompetent or incapacitated person or to any person claiming by, through, or under any decedent or mental incompetent or incapacitated person unless the claim or interest of such person then appears of record.

COMMENT: Even if one of the situations is known to the public trustee, no additional notice requirement is thus created.

(3) The interest and claim in and to such real estate of all mental incompetents or incapacitated persons and of all persons claiming by, through, or under any mental incompetent, incapacitated person, or decedent, including minors and incapacitated persons, shall be terminated and concluded by such foreclosure unless they redeem from the foreclosure sale within the time prescribed by law.

COMMENT: There also is no different treatment of a lienor who falls into one of these categories. The interest is terminated unless redemption occurs under 38-38-302.

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(1) As used in this section, "omitted party" means any person who: (a) Prior to the recording of the notice of election and demand or lis pendens, has either acquired a record interest in the property or has obtained a valid possessory interest and is in actual possession of the property, which interest is junior to the deed of trust or other lien being foreclosed and would otherwise be extinguished by the foreclosure; and (b) Is not included as a party defendant in a judicial foreclosure action or, if included, is not served with process, or is not served with notice of levy or seizure pursuant to section 13-55-102, C.R.S., or is not notified pursuant to section 38-38-103 of a sale, or is not notified in connection with the legal proceedings contemplated by section 38-38-105.

COMMENTS: 1. An omitted party is someone who should have been included in the mailing list or amended mailing list of 38-38-100.3(1.5) and (14) and the mailing under 38-38-103(1) but was not, or who was not notified of the Rule 120 hearing in 38-38-105. Most commonly, the omission is due to a failure on the part of the holder to provide a correct mailing list. 2. If the party was omitted due to a failure of the public trustee to send the notice, the remedy prior to sale is to restart the foreclosure under 38-38-705(1).

(2) (a) The interest of an omitted party in the property that is the subject of a sale may be terminated if the omitted party, or anyone claiming by, through, or under an omitted party, in a civil action commenced at any time by any interested person as defined in paragraph (c) of this subsection (2), by an omitted party, or by anyone claiming by, through, or under an omitted party, is afforded rights of cure if the omitted party would have been entitled to cure pursuant to section 38-38-104, or is afforded redemption rights if the omitted party would have been entitled to redeem pursuant to section 38-38-302, upon such terms as the court may deem equitable under the circumstances, which terms shall not, however, be more favorable than the person's statutory rights. The court shall give full consideration to whether the omitted party or anyone claiming by, through, or under an omitted party was given or had actual notice or knowledge of the foreclosure and was given an opportunity to exercise statutory rights to cure or redeem.(b) For purposes of this section, the lien that is the subject of the sale shall not be extinguished by merger with the title to the property acquired pursuant to section 38-38-501 until the interest of any omitted party has been affirmed pursuant to subsection (3) of this section or has been terminated as provided in paragraph (a) of this subsection (2), or by operation of law. The omitted party, or anyone claiming by, through, or under an omitted party, cannot extinguish the lien that is subject to the sale by enforcement of the lien of the omitted party.(c) As used in this section, "interested person" means the holder of the evidence of debt being foreclosed, a holder of a certificate of purchase or certificate of redemption issued pursuant to section 38-38-401 or 38-38-402, or an owner of the property pursuant to section 38-38-501 or a person claiming by, through, or under such holder or owner.(d) An omitted party, or anyone claiming by, through, or under an omitted party, shall not have a remedy to cure or redeem, except as set forth in this subsection (2). An interested party shall not be able to extinguish an omitted party’s interest except as set forth in this subsection (2) or by written waiver or agreement signed by the omitted party or anyone claiming by, through, or under an omitted party.

COMMENTS: 1. The remedy for an omitted party is an order from the court creating an opportunity for the party to cure or redeem. The public trustee cannot create this opportunity. 2. If a party is omitted but aware of the foreclosure, the party may have no recourse. For example, if a lienor claims during the 8 business days after sale to be an omitted party, the lienor should simply file an intent to redeem. The right to redeem is thus honored despite the omission. There is no need to verify that someone filing an intent to redeem was in fact on the mailing lists,

(3) If an interested person files with the officer at any time a document affirming an omitted party's interest in the property, subject to the terms, conditions, and provisions of the recorded instrument from which such omitted party's interest is derived, or in the case of an omitted party that is a lessee, subject to the terms and conditions of the lease, whether written or oral, the interest of such omitted party in the property shall not be affected by the foreclosure, and such omitted party shall have no right to cure or redeem.COMMENT: This provision is generally used by the holder to “affirm the leases” of any tenants who were not included in the mailing lists used for the notices in 38-38-103(1) – such leases are usually not recorded. This maintains the existing lease after foreclosure, eliminating a right to cure or redeem even if the lease was recorded prior to the recording of the NED. In principle, it appears that this provision could also be used to affirm the interest of omitted junior lienors, though if such are identified prior to sale, the simpler solution would be submit an amended mailing list under 38-38-103(2) so the junior interests are extinguished. An example of an affirmation is below (exact form and content may vary).

38-38-601. Receiver appointed upon application. (1) When an action or proceeding has been commenced to foreclose a mortgage, trust deed, or other instrument securing an indebtedness, a receiver of the property affected shall be appointed upon application at any time prior to the sale, if it appears that the security is clearly inadequate or that the premises are in danger of being materially injured or reduced in value as security by removal, destruction, deterioration, accumulation of prior liens, or otherwise so as to render the security inadequate.(2) If the facts would justify the appointment of a receiver under this section but one is not applied for and if the premises are abandoned by the owner thereof, the holder of the lien may take possession until the sale and shall be subject to the same duties and liabilities for the care of the premises and for the application of the rents and profits as would a receiver.

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38-38-602. Appointment of receiver to prevent waste.

(1) During the period of redemption, the owner of the premises or the person in possession shall not commit waste, and the purchaser shall have such action or remedy for waste, including injunction, as he would have as owner of the premises. During such period, the owner of the premises shall keep the premises in repair, shall use reasonable diligence to continue to keep the premises yielding an adequate income, and shall pay current taxes before a penalty accrues and interest becomes due on any prior encumbrance, keep the premises insured for the protection of the holder of the certificate of purchase, and, in case of a leasehold, pay the rent and other sums due under the lease, and failure to do so shall constitute waste. In case of waste committed or danger of waste or an actual probability of the security being rendered inadequate, a receiver may be appointed to take possession and preserve the property at any time after the sale under such foreclosure. A receiver appointed before the sale shall continue after sale unless otherwise directed by the court.(2) If the facts would justify the appointment of a receiver under this section but one is not applied for and if the premises are abandoned by the owner thereof, the purchaser may take possession and shall be subject to the same duties and liabilities for the care of the premises and for the application of the rents and profits as would a receiver.(3) Nothing in this article shall restrict the power of the court in the appointment of a receiver pursuant to existing law or pursuant to agreement between the parties.

38-38-701. Application - use of term "foreclosure".

(1) Except as otherwise provided for in subsection (2) of this section, the provisions of this article shall apply: (1) Except as otherwise provided for in subsection (2) of this section, the provisions of this article shall apply:(a) To proceedings for the foreclosure of deeds of trust through the public trustee commenced on or after July 1, 2007; and(b) In the case of proceedings and actions for enforcement or foreclosure of any other types of liens upon real property and in the case of sales by virtue of execution and levy, where the particular proceeding or action under which the sale is performed is commenced on or after July 1, 2007. (2) On and after October 1, 1990, in all proceedings for the foreclosure of deeds of trust and mortgages executed before July 1, 1965: (a) The provisions of sections 118-9-2 and 118-9-3, Colorado Revised Statutes 1963, as said sections existed prior to July 1, 1965, shall apply in lieu of section 38-38-302 and section 38-38-303 (1) to (3) as it existed prior to January 1, 2008; and (b) The provisions of section 118-9-18, Colorado Revised Statutes 1963, as in effect on July 1, 1965, and numbered as sections 38-38-103 and 38-38-104 on and after October 1, 1990, shall not apply.(3) Wherever the term "foreclosure", or variations thereof, or the concept of "foreclosure" is used in or referred to in article 37, 38, or 39 of this title, it shall be deemed to include sales of real estate upon execution, unless the context otherwise requires.

COMMENT: The standalone term “foreclosure” is supposed to refer to sales only. Use “foreclosure start” or “foreclosure filing” if you are referring to the recording of the NED

(4) If a deed of trust grants a power of sale to the public trustee but contains no provision on the manner in which the power of sale is to be exercised, the deed of trust shall not be void or voidable, and the holder of the evidence of debt may foreclose the deed of trust in accordance with the provisions of this article on the foreclosure of deeds of trust through the office of the public trustee or in the manner of a mortgage through the courts.

COMMENT: The deed of trust does not need to spell out the details of the power of sale to be valid and foreclosable by the public trustee under the provisions of Article 38

38-38-702. Limitation of officer's liability. (1) An officer shall not have responsibility or liability for determining:(a) The amount or reasonableness of a bid at a sale under section 38-38-106, the amount required to cure under section 38-38-104, or the amount required to redeem under section 38-38-302;(b) The accuracy of the legal description of property in a full or partial release of a deed of trust;(c) The accuracy or completeness of a mailing list submitted to the officer; or(d) The legal sufficiency of the description of the property contained in the notice of election and demand.

COMMENTS: 1. This does not mean that you cannot review these items and send questions back to the person who provided the information. For example, the address may be an obvious mismatch with the legal description, there may be parties obviously missing from the mailing list, the legal description may not seem to make sense, or the fees and costs of bid, cure, or redemption maybe problematic. Entitlement to cure must be demonstrated to your satisfaction, but this discretion should be exercised with due care. If there is no legal description of the property in the deed of trust, or the deed of trust and NED legal descriptions do not match, you should reject the foreclosure.

(2) Nothing in this article shall lessen or otherwise modify the immunities and protections extended by law to an officer or to a governmental entity with which an officer is associated.

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(3) An officer shall not have responsibility of liability for unknown damage, debt, or liens when a third party seeks a judicial foreclosure and sale.

38-38-703. No waiver of or agreement to shorten right to cure.

A waiver of or agreement to shorten the time period to exercise the right to cure a default granted by the provisions of this article that is made before the date of the default as to which the waiver is granted under a deed of trust, mortgage, or other instrument evidencing a lien or an evidence of debt secured thereby shall be void as against public policy.

COMMENT: The right to cure described in 38-38-104 may not be waived or shortened before the default occurs. It may be waived or shortened for a current default, but that agreement would not carry over to a future default.

38-38-704. Providing information to homeowner and public - repeal.

(1) Repealed.(2) (a) Notwithstanding any provision of the deed of trust or other lien being foreclosed or any provision of law to the contrary, an officer may, at his or her discretion, provide to an owner of the property or to any person liable on the secured indebtedness or other lien being foreclosed, or otherwise make available to the general public, any educational or other information or material concerning foreclosures under this article, including available community resources and foreclosure prevention information, that has been approved by the office of the attorney general, by an agency of the state of Colorado or the federal government, or by an attorney currently licensed to practice and in good standing in the state of Colorado and retained by a public trustee for such purpose. The officer may charge the fees and costs of providing such information or materials to the property owner or person liable on the debt as foreclosure fees and costs; except that the amount of such fees and costs charged shall not exceed twenty-five dollars.

COMMENTS: 1. This section allows the public trustee to spend money to provide educational information to persons involved in a foreclosure and to the general public. Most commonly, this will include letters or brochures included with the mailings described in 38-38-103(1) and (2) and materials made available to the public in the office or at the foreclosure sale. Some examples are embedded below. It would also include less-common actions such as sending a letter to the owner of the property letting them know that the property has been sold or the foreclosure withdrawn. 2. The information provided must have been approved by the Colorado attorney general, another state or federal agency, or the public trustee’s attorney. 3. The reference to chargeable “fees and costs” seems to refer to 38-37-104(1)(b)(X) allowing recovery of expenses actually incurred by the officer conducting the sale. Thus the office could charge to the file the material cost of preparing this information but not the cost of in-house labor. While the reference here allows the charges to be passed directly to the property owner or grantor on the debt, the more likely route for passing the fees and costs is to charge the attorney for the holder as a foreclosure cost. It is unlikely, and perhaps a bit against good public policy, that you would charge a property owner when you provide an intent to cure form to fill out at the counter. 4. The reference to fees and costs also implies that the costs should be traceable. This is not a license to charge $25 additional on every foreclosure. 38-37-104(1) states the public trustee “shall be entitled to receive as fees for such services the following sums and no other fees or perquisites whatever;” the only provision that would allow collection under this article would be 38-37-104(1)(b)(X).

(b) This subsection (2) shall take effect July 1, 2007.

38-38-705. Curative provisions.

(1) If the public trustee fails to comply with any of the notice deadlines set forth in this article, unless the foreclosure has already been withdrawn by the holder of the evidence of debt or the holder's attorney, following written notice to the holder of the evidence of debt or the holder's attorney, the public trustee may rerecord the notice of election and demand, and the public trustee shall thereafter comply with all such notice deadlines from the last recording date as set forth on the rerecorded notice of election and demand as though such foreclosure had been commenced on such date.(2) In the event of an error contained in any certificate of purchase, certificate of redemption, public trustee's deed, or other recorded document prepared by the office of the public trustee, the public trustee may correct such error by executing and recording a scrivener's error affidavit as set forth in section 38-35-109 (5).

COMMENTS: 1. “Notice Deadlines” generally refers to the mailings described in 38-38-101(9), 38-38-103(1), 38-38-103(2), 38-38-109(2)(c), 38-38-113(3), 38-38-113(4)(b), 38-38-803(6), and 38-38-904(2)(d). “Failure to comply” may mean failing to send the notice on time or at all or failing to send the correct information. 2. If the failure in the mailed notice is a failure to send the correct information, and if the failure is discovered prior to the expiration of the mailing deadline, you may fix the error by mailing the correct information within the deadline.

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3. A failure to publish, or an error in the publication, is corrected without a restart by republishing according to 38-38-109(1)(b). 4. A “restart” of a foreclosure resets all deadlines and timetables. It also re-sets the NED recording date for purposes of whether or not a junior lien has a right to redeem. 5. Under 38-37-110, failure “to meet the time requirements” of 38-38-103(1) results in a forfeiture of 5% of the foreclosure fee per day, or $7.50 for a standard foreclosure. This is presumably calendar days, since the type of day is not specified. It is not clear if this applies only if the notice was not sent on time or if it also applies if there was some error in the notice that required a re-start of the foreclosure. It is also not clear if the penalty applies only to a failure to meet the two specific deadlines in 38-38-103(1) or if also applies to the other notice deadlines (all of which refer back, eventually, to 38-38-103). 6. Given that any of these errors must be the fault of the office, in addition to any forfeiture of the foreclosure fee, it is generally appropriate (but not required) for the public trustee to waive the cost of re-recording the NED, re-mailing the notices, and republishing if publishing has already been charged to the file.

(2) In the event of an error contained in any certificate of purchase, certificate of redemption, public trustee's deed, or other recorded document prepared by the office of the public trustee, the public trustee may correct such error by executing and recording a scrivener's error affidavit as set forth in section 38-35-109 (5).

COMMENTS: 1. The use of the scrivener’s error affidavit applies only to documents created and recorded by the public trustee. The NED was created by the holder or the holder’s attorney and cannot be corrected by the public trustee. Our guidance from the PTAC attorney is that a scrivener’s affidavit prepared by the holder or holder’s attorney also may not be used to correct errors in the recorded NED, since there is no provision for doing so. If there is an error in a recorded NED, the only options are for the foreclosure to be withdrawn and refiled with correct documents or for the foreclosure to proceed with the error being duplicated in subsequent documents. 2. If the error in the recorded document prepared by the public trustee is the fault of the office, it is generally appropriate (but not required) for the public trustee to pay that charge from the operating account rather than charging it back to another party. 3. If the error in the recorded document prepared by the public trustee is the fault of a third party, most commonly a successful third party bidder, judgment is required to determine if the scrivener’s affidavit is appropriate. An incorrect address for the CoP holder may be reasonable to correct, though the third party should bear the cost. If the CoP holder bid under a certain name at sale and wants to change that name after sale, it is generally not appropriate to use the affidavit as this is not a scrivener’s error. An assignment of the CoP or a quit claim deed may be a more appropriate way for the successful bidder to change the title of the property.

TITLE 38, ARTICLE 39: MORTGAGES, DEEDS OF TRUST, AND OTHER LIENS

RELEASES OF DEEDS OF TRUST

15-12-1201. Collection of personal property by affidavit

(1) At any time ten or more days after the date of death of a decedent, any person indebted to the decedent or having possession of any personal property, including but not limited to funds on deposit at, or any contents of a safe deposit box at, any financial institution; tangible personal property; or an instrument evidencing a debt, obligation, stock, chose in action, or stock brand belonging to the decedent shall pay or deliver such property to a person claiming to be a successor of the decedent or acting on behalf of a successor of the decedent upon being presented an affidavit made by or on behalf of the successor stating:(a) The fair market value of property owned by the decedent and subject to disposition by will or intestate succession at the time of his or her death, wherever that property is located, less liens and encumbrances, does not exceed twice the amount set forth in section 15-11-403, as adjusted by section 15-10-112;(b) At least ten days have elapsed since the death of the decedent;(c) No application or petition for the appointment of a personal representative is pending or has been granted in any jurisdiction; and(d) Each person is entitled to payment or delivery of the property as set forth in such affidavit.(1.5) An instrument or other property that is payable or deliverable to a decedent or to the estate of a decedent is considered property of the decedent subject to subsection (1) of this section. A successor or person acting on behalf of a successor under subsection (1) of this section may endorse an instrument that is so payable and collect such amount.(2) A transfer agent of any security shall change the registered ownership on the books of a corporation from the decedent to the successor or successors upon the presentation of an affidavit as provided in subsection (1) of this section.(3) The public official having cognizance over the registered title of any personal property of the decedent shall change the registered

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ownership from the decedent to the successor or successors upon the presentation of an affidavit as provided in subsection (1) of this section.(3.5) In the event that an instrument or other evidence of an indebtedness is secured by real property, in order to act on behalf of the holder of the indebtedness secured by a mortgage, deed of trust, or other security document, the person making the affidavit must record, with the clerk and recorder of the county where the real property is located, a copy of the affidavit and a copy of the decedent's death certificate or a verification of death document.(3.7) Pursuant to section 15-10-111 (1) (a) (I) and (1) (b), a safe deposit box may be entered and its contents shall be delivered upon presentation of an affidavit made pursuant to subsection (1) of this section.(4) The duties owed to a successor by a person acting on behalf of the successor in the making, presentation, or other use of an affidavit under this section are the same as the duties of an agent to the agent's principal, and the breach of such duty is subject to the same remedies as are available under the law of this state with respect to an agent subject to part 7 of article 14 of this title, including but not limited to the remedies available under part 5 of article 10 of this title. A successor who makes, presents, or uses such an affidavit where there are two or more successors is a person acting on behalf of each other successor.

38-39-100.5. Definitions.

The definitions in section 38-38-100.3 apply to this article unless the context otherwise requires.

38-39-101. Effect of deed of trust to private trustee - nature of obligation secured.Any deed of trust that names any person other than a public trustee as trustee therein or that secures an obligation other than an evidence of debt shall be deemed and taken to be a mortgage for all purposes and foreclosed only as mortgages are foreclosed in and through the courts; except that any deed of trust that names a public trustee as trustee therein and secures an obligation other than an instrument evidencing a debt shall be released as provided in section 38-39-102 (5).

COMMENTS 1. If the deed of trust names a public trustee as trustee, then it can be released whether or not the obligation secured is an evidence of debt as defined in 38-38-100.3(8). If the obligation is not an evidence of debt, the document evidencing the secured obligation does not need to be presented. 2. If the deed of trust names someone other than a public trustee as trustee, then the public trustee cannot release it (or foreclose upon it). 3. A “deed of trust” made to a private trustee (someone other than a public trustee) could become a deed of trust naming the public trustee by a proper amendment signed by both grantor and beneficiary. 4. Deeds of trust listing a private trustee are rare and sometimes accidental. 38-37-106(2) states that you shall accept a deed of trust that names the wrong public trustee or lists no county as if it named your own. In may be reasonable to extend this to include deeds of trust that are “wrong” in the county named even if the county is not a county in Colorado or perhaps is not an actually county at all. It is appropriate to accept the deed of trust if it lists the name of an actual Colorado public trustee. But a deed of trust that names as public trustee a bank, a law firm, an individual lawyer, or a street address (all real examples) is not a deed of trust that you may release.

38-39-102. When deed of trust shall be released. (1) (a) Except as otherwise provided in paragraph (a) of subsection (3) of this section, a deed of trust to the public trustee, upon compliance with the provisions of the deed of trust, shall be released by the public trustee upon the:

COMMENT: It is not clear why this subsection refers only to paragraph (3)(a). Paragraphs (3)(b) and (3)(c), as well as subsections (2) and (5), also provide exceptions to the general guidelines in this section.

(I) Receipt of a written request from the holder of the evidence of debt secured by the deed of trust, the holder's agent or attorney, or a title insurance company providing an indemnification agreement and affidavit described in paragraph (c) of subsection (3) of this section, which request shall be duly executed and acknowledged;

COMMENTS: 1. A release under this subsection with the production of the original evidence of debt should be on a form similar to what is in 38-39-107. As long as the original evidence of debt is provided, there is room for a lot of variance from this form, including the use of old versions. 2. You should verify that the party releasing is in fact the holder, by comparison to the original note and any indorsements, assignments and allonges that accompany it. If the holder cannot demonstrate the right to release, reject the release. 3. An attorney for the holder may sign with a bar number. Someone signing as agent or under power of attorney needs to provide documentation establishing the relationship and the authority to release the deed of trust. That

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documentation should be recorded with the release unless it has been separately recorded and the release references that reception number. 4. Most often, if a title company is signing the release, it will use the “without production” form of 38-39-108, which already has the indemnification language included. If the title company uses the “with production” release, it needs to duplicate that language. 5. If the holder is deceased, the release may be signed by the estate of that holder. Such a release should be accompanied by letters of appointment that demonstrate the right to sign. Attach the letters to the release when you record the release, unless they have already been recorded. 6. Since the document is signed and acknowledged, it is not appropriate to annotate or correct the document due to apparent errors. Either execute the document as presented or reject it and return it with an explanation of the rejection reasons. 7. Under 38-35-124, the holder is required to release the lien within 90 days of the satisfaction of the lien.

(II) Production of the original cancelled evidence of debt such as a note or bond as evidence that the indebtedness secured by such deed of trust has been paid; except that such production may be omitted in the circumstances contemplated in subsection (3) of this section;

COMMENTS: 1. Probably, a majority o f releases use subsection (3) and do not include the original evidence of debt. If you are presented with what purports to be an original, do your best to determine if it is an original or a copy. A copy (including an electronic copy) is not acceptable, as the original could then later be presented by another party, claiming the right to enforce the lien. 2. There is no specific formula for cancelling the evidence of debt. Typically it is stamped “cancelled” or “paid in full.” The notation may also be handwritten. There is no requirement for the cancellation to be signed. 3. Although this subparagraph requires the evidence of debt to be cancelled, subsection (2) provides for the release of a deed of trust without cancellation of the note. A partial release under that subsection also would not involve a cancelled evidence of debt. If you get a request for a full release without a cancelled note, release under subsection (2) as long as the release request includes the statutory language certifying that the purpose of the deed of trust has been fully or partially satisfied 4. The examples provided in this subparagraph lead to confusion. The word “bond” is not a reference to the corporate security (lost instrument) bond allowed under paragraph 3(b). The term “evidence of debt” is defined in 38-38-100.3(8) as a promissory note, a bond, or several other examples of “a writing that evidence a promise to pay or a right to the payment of a monetary obligation.” A release accompanied by a lost instrument bond is still a release without production of the evidence of debt, and must use the form in 38-39-108. 5. The claim will sometimes be made that no evidence of debt was ever created. This is possible, but unlikely, and outside your ability to verify. Almost all deeds of trust include a reference to a note, or some other obligation to pay. Unless the deed of trust specifically states that there is no separate note, or indicates that it is a hybrid document, do not take someone’s word that there is no evidence of debt. The true holder of the note could appear and attempt to enforce the lien. 6. The evidence of debt should include a chain of assignments or allonges from the original holder to the holder who signed the release. 7. Subsection (5) explains how to release a deed of trust that secures something that is not an evidence of debt. This does not cover the claim that there is “no” evidence of debt. 8. If the evidence of debt was provided, its value, dates, and other details should match what is shown on the deed of trust. Any variation suggests the possibility that there may have been multiple evidences of debt, and/or that the evidence of debt provided is not the correct one. You may reject the release based on this discrepancy, but doing so will leave the lien in place indefinitely since the lender may not be motivated to formally modify the documents to make them align. You may also accept the release regardless of discrepancy, since the law does not clearly direct you to make sure that the documents agree. A better option may be to ask the holder to provide documentation or affidavits asserting that any variation among the documents is due to error in their preparation. Such documentation should be recorded with the release.

(III) Receipt by the public trustee of the fee prescribed by section 38-37-104 (1) (a) and the fee for recording the release; COMMENT: The release fee is $15, and the recording fee is $13 for the first page + $5 for any additional pages due to a multi-page release form, attached exhibit for a partial release, or recording of affidavits, bonds, or powers attorney that support the release.

(IV) Receipt by the public trustee of a current address for the original grantor, assuming party, or current owner or either a notation on the request for release of the deed of trust or a written statement from the holder of the evidence of debt secured by the deed of trust, the title insurance company licensed and qualified in Colorado, of the holder of the original evidence of debt that is a qualified holder, as defined in section 38-38-100.3 (20), that they have no record of a current address that is different from the address of the property encumbered by the deed of trust being released; except that it shall be within the public trustee’s discretion to release a deed of trust, upon compliance with the provisions of the deed of trust, if the public trustee has not received the information required pursuant to this subparagraph (IV); and

COMMENT:

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1. There is a section in the upper left of the standard release forms for this information. The information is used by the clerk and recorder to forward the recorded release to the grantor according to section 38-39-109. The information is required, except that you may execute the release even if it is not provided. It generally would be against the interest of the grantor (and thus public policy) to decline to release a deed of trust because this information was not included. 2. The requirement for the address is repeated in sub-paragraphs (3)(a)(II), (3)(b)(II), and (3)(c)(III). Even though that paragraph does not include the waiver of the requirement, it is reasonable to think that you may release without the address even if that subsection applies.

(V) Production of the original recorded deed of trust securing the evidence of debt or a legible copy thereof.COMMENTS: You need to have at least enough of the deed of trust to verify the following. 1. The deed of trust names the public trustee as trustee. If not, 38-39-101 applies. 2. The legal description of the property shows that it is in your county. If not, subsection (8.5) applies. The release must be executed in the correct county. 3. The deed of trust was recorded in your county. If not, subsection (8.5) again applies. You may not release a deed of trust that has not been recorded in your county. 4. The recording information and dates on the deed of trust match what is on the release form. If not, either you have been presented with the wrong deed of trust or the release has errors that will prevent it from being indexed correctly. 5.The parties (grantors and original beneficiaries) match across the deed of trust, evidence of debt (if provided), and release form. If they do not, reject the release. 38-35-116 allows for some variation in the names presented, so judgment may be required. 6. If the deed of trust is unsigned, or signed by the lender rather than the borrower, the deed of trust is void. You still may release it if the statutory requirements are met.

(b) Immediately upon execution of the release of the deed of trust by the public trustee, the public trustee shall cause the release to be recorded in the records of the county clerk and recorder.

COMMENT: 1. “Immediately” is unrealistic or impossible. Send the release to be recorded as soon as reasonably practical after it is executed. 2. There is no requirement for the office to keep its own records of releases received, executed, or rejected. 3. There is no requirement that the office mark or stamp the evidence of debt or deed of trust in any way. Marking a copy is clearly without purpose, since another copy could be obtained that is unmarked. The original evidence of debt will have already been marked as cancelled, and the recorded release will cancel the deed of trust more surely than any stamp you add. Despite this, it may be worth it to stamp documents for non-institutional releases rather than explaining why it is not necessary. 4. Execution of the release involves a signature, the name and title of the person signing, and stamping the release with the public trustee’s seal. The person signing must be either the public trustee or someone deputized under 38-37-103 as a deputy public trustee.

(2) If the purpose of the deed of trust has been fully or partially satisfied and the indebtedness secured by such deed of trust has not been paid, the public trustee shall release the deed of trust as to all or portions of the property encumbered by the deed of trust pursuant to the provisions of subsection (1) of this section if the request to release certifies that the purpose of the deed of trust has been fully or partially satisfied and if either the original evidence of debt is exhibited or the holder of the evidence of debt is a qualified holder.

COMMENTS:1. A “partial release” should be marked as such on the form and list the property that is being released. If there is a discrepancy – if the release is marked as partial but lists the full property or no property, or is marked as full but lists part of the property – reject the release. Such a release will be difficult to properly interpret once it is recorded. 2. As a courtesy, verify that the property listed in a partial release is included in the property that was encumbered by the deed of trust. Although a release of property that was not encumbered in the first place does not directly do any harm (it is meaningless), presumably the party requesting the release was trying to accomplish something. Either they listed the wrong property to release or they are releasing it from the wrong deed of trust. If this cannot easily be determined, process the release. 3. You may fully release the deed of trust whether or not the original evidence of debt is marked as cancelled. If the original evidence of debt is not marked cancelled, release under this subsection(2) as long as the release request includes the statutory language certifying that the purpose of the deed of trust has been fully or partially satisfied.

(3) (a) (I) Subject to the provisions of subparagraph (II) of this paragraph (a), with respect to either subsection (1) or (2) of this section, a holder of the original evidence of debt that is a qualified holder, as defined in section 38-38-100.3 (20), may request the release of a deed of trust without producing or exhibiting the original evidence of debt. A holder that requests the release of a deed of trust pursuant to this paragraph (a) shall be deemed to have agreed to indemnify and defend the public trustee against any claim made within the period described in subsection (7) of this section for damages resulting from the action of the public trustee taken in accordance with the request. The indemnity granted by this paragraph (a) is limited to actual economic loss suffered and any court costs and reasonable attorney fees and costs incurred in defending a claim brought as a direct and proximate result of the failure to produce the original evidence of debt, but

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the indemnity does not include and no claimant is entitled to any special, incidental, consequential, reliance, expectation, or punitive damages. No separate indemnification agreement shall be necessary for the agreement to indemnify to be effective.

COMMENTS: 1. A qualified holder may request a release without providing the original evidence of debt. The required language is included in the standard form for 38-39-108. Verify that the qualified holder is in fact a qualified holder – see comments to 38-38-100.3(20). 2. Mortgage Electronic Registration System (MERS) is very rarely the actual holder of the evidence of debt. Even if it is the holder, MERS is not a qualified holder and cannot release without producing the original evidence of debt.

(II) A holder of the original evidence of debt that is a qualified holder, as defined in section 38-38-100.3 (20), shall provide the public trustee with a current address for the original grantor, assuming party or current owner when requesting a release of a deed of trust pursuant to this paragraph (a).

COMMENT: Under subparagraph (1)(a)(IV), the release may be processed even without this information where the original evidence of debt is presented. No comparable statement is made here, but logically that provision would also apply to a release without the original evidence of debt being provided.

(b) (I) Subject to the provisions of subparagraph (II) of this paragraph (b), with respect to either subsection (1) or (2) of this section, the holder of the evidence of debt may request the release of a deed of trust without producing or exhibiting the original evidence of debt. A holder that requests the release of a deed of trust pursuant to this paragraph (b) shall deliver to the public trustee a corporate surety bond in an amount equal to one and one-half times the original principal amount recited in the deed of trust, which corporate surety bond shall remain in full force and effect for the period described in subsection (7) of this section;

COMMENTS: 1. This subparagraph is vague as to the requirements of a corporate surety bond, also known as a lost instrument bond. On the advice of PTAC attorney, the bond should: A. List as principal the holder of the evidence of debt that is lost and the public trustee as obligee, B. Include the recording information of the deed of trust, C. Include the names of the original parties to the deed of trust,D. If signed by an agent for an insurance company, be accompanied by a power of attorney, E. Be valid for at least 6 years, and F. Have a value equal to 1.5 times the original principal amount of the evidence of debt stated in the deed of trust (you don’t know what the evidence of debt showed as the principal amount, since you don’t have it). 2. It does not matter who actually purchases the bond, and you generally will not know. 3. The bond does not “replace” the evidence of debt, allowing the use of the “with production” form in 38-39-107. The release still must be executed by the holder using the form in 38-39-108, correctly marked. 4. The purchase of a bond by the borrower in conformance with these guidelines does not transform the borrower into the holder. The borrower is not authorized to release the deed of trust. If the problem with the release is a “lost holder” rather than a “lost instrument,” the borrower must undertake a quiet title action, convince a title company to request the release under paragraph (3)(c), or wait out the term of the lien according to 38-39-201, 202 and 204. 5. Make a copy of the bond to record with the release and keep the original bond in your records for at least 6 years.

(II) A holder of the original evidence of debt shall provide the public trustee with a current address for the original grantor, assuming party or current owner when requesting a release of a deed of trust pursuant to this paragraph (b).

COMMENT: Under subparagraph (1)(a)(IV), the release may be processed even without this information where the original evidence of debt is presented. No comparable statement is made here, but logically that provision would also apply to a release without the original evidence of debt being provided..

(c) (I) Subject to the provisions of subparagraph (II) of this paragraph (c), with respect to either subsection (1) or (2) of this section, a title insurance company licensed and qualified in Colorado may request the release of a deed of trust without producing or exhibiting the original evidence of debt. A company that requests the release of a deed of trust pursuant to this paragraph (c) shall be deemed to have agreed to indemnify and defend the public trustee against any claim made within the period described in subsection (7) of this section for damages resulting from the action taken by the public trustee in accordance with the request. The indemnity granted by this paragraph (c) is limited to actual economic loss suffered and any court costs and reasonable attorney fees and costs incurred in defending a claim brought as a direct and proximate result of the failure to produce the original evidence of debt, but the indemnity does not include and no claimant is entitled to any special, incidental, consequential, reliance, expectation, or punitive damages. No separate indemnification agreement shall be necessary for the agreement to indemnify to be effective; however, the company shall provide to the public trustee an affidavit executed by an officer of the company stating that the company has caused the indebtedness secured by the deed of trust to be satisfied in full or, in the case of a partial release, to the extent required by the holder of the indebtedness.

COMMENT: A title company licensed in Colorado may request a release without providing the original evidence of debt. The required language is included in the standard form for 38-39-108.

(II) A title insurance company licensed and qualified in Colorado shall provide the public trustee with a current address for the original grantor, assuming party or current owner when requesting a release of a deed of trust pursuant to this paragraph (c).

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COMMENT: Under subparagraph (1)(a)(IV), the release may be processed even without this information where the original evidence of debt is presented. No comparable statement is made here, but logically that provision would also apply to a release without the original evidence of debt being provided.

(3.5) Venue for any action based upon the indemnification agreement specified in paragraph (a) of subsection (3) of this section shall be proper only in the county in which the public trustee receiving the certification is located.

COMMENT: If someone wants to challenge a release made without production of the original evidence of debt, the challenge must be filed in the county where the release was executed – which will be the county where the property is located.

(4) A public trustee shall have no duty to retain the original cancelled evidence of debt or deed of trust upon a release granted pursuant to this section.

COMMENTS: 1. You do not need to keep these documents, and you are not required to stamp them in any way. The recorded release voids the lien, and only a court order can reinstate it. 2. If the party releasing the lien provides postage-paid envelopes for the return of documents, then it is appropriate to do so. The only legal reference to the return of the original note is in 38-35-124, which requires the holder to do so if asked in writing at the time the lien was satisfied. 3. In the case of a partial release or a release under section (2), you should return the original documents to the submitter even at your own cost. Keeping in mind that, if the holder cannot find the original evidence of debt for foreclosure after a partial release, the decision may be made that you have lost it, at a minimum having a written policy of how and to whom such evidence of debt are to be returned is a good idea. PTAC recommends that you make a policy of with respect to whether or not you will absorb the cost of certified mail with return receipt, or if you will notify the holder that you will send them back by regular mail if they do not provide a certified envelope or pick them up. Most of the time, partial releases off a live note are hand-delivered to the public trustee and will be picked up by the holder’s representative. 4. There is no good reason to spend office funds to return copies of deeds of trust. The public policy value of spending office funds to return cancelled original documents is unclear.

(5) The lien represented by a deed of trust to the public trustee that secures an obligation other than an evidence of debt shall be released by the public trustee pursuant to the provisions of subsection (1) of this section as to all or portions of the property encumbered by the deed of trust upon the: (a) Receipt of a written request of the beneficiary or assignee of such deed of trust, which request shall be duly executed and acknowledged;(b) Presentation to the public trustee of an affidavit of such beneficiary or assignee stating that the purpose of the deed of trust has been fully or partially satisfied; and(c) Receipt by the public trustee of the fee prescribed by section 38-37-104 (1) (a) and the fee for recording the release.

COMMENTS: 1. If there is no evidence of debt secured by the deed of trust, it cannot be provided as required by subsection (1), and the form described in section 38-39-108 won’t make sense. This section provides the means for releasing this type of deed of trust. 2. Although the law does not specify, the request for release should include a signature block for the public trustee similar to the standard forms.

(6) The public trustee shall have no liability to any person, and no action may be commenced against the public trustee, as a result of issuing a release or partial release of a deed of trust under subsection (3) of this section, unless such action is commenced within six years from the date of the recording of such release or partial release or within the period of time prescribed by any statute of limitation of this state in which a suit to enforce payment of the indebtedness or performance of the obligation secured by said deed of trust may be commenced, whichever is less. Nothing in this article shall be construed to waive immunity of a public trustee that is provided in sections 24-10-101 to 24-10-120, C.R.S.

COMMENTS: 1. The latest date on which a release may be challenged is 6 years from the recording of the release. Thus you must ensure that the lost instrument bond of paragraph (3)(b) is valid for those 6 years. 2. Retain release-related documents – affidavits, bonds, powers of attorney for that 6 year period. If it is simpler, retain for 7 years to match that limitations of foreclosure claims in 38-39-208.

(7) The indemnification agreements or the corporate surety bond described in this section shall, in each case, remain effective for the time period described in subsection (6) of this section or until such time as any claim made against the public trustee within such time period has been finally resolved, whichever is longer.

COMMENT: If a claim is filed and unresolved after 6 years, the bond and indemnification remain in effect until the claim is resolved.

(8) If the written request to release the lien of any deed of trust is a fraudulent request, the release by the public trustee based upon such request shall be void.

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COMMENT: While a fraudulent release is void, it requires a court order to confirm the existence of the lien for the public record. The public trustee cannot do this and does not determine that the request was fraudulent. The genuine holder of the evidence of debt would bring the claim to court.

(8.5) If a deed of trust is improperly recorded in the office of the clerk and recorded of a county other than the county in which the real property is located, the deed of trust must be recorded in the correct county before the public trustee may release the deed of trust. The public trustee of a county other than the county wherein the real property is located shall not release the deed of trust.

COMMENTS: 1. You may not release a deed of trust for property that is not located in your county – you should verify the property to be released is in your county. If the deed of trust recorded in your county encumbers property in another county, it is void by law anyway. The holder should release the deed of trust in the correct county, and then, without interaction with your office, re-record that release in your county referencing the erroneously recorded deed of trust just to match up the clerk’s indexing. 2. You also may not release a deed of trust that was not recorded in your county even if it covers property in your county. The release could not be indexed by your clerk. The holder should re-record the deed of trust in your county, and then you can release the re-recorded deed of trust. Since the lien is satisfied, the only reason to do this is so the holder can then take your recorded release and re-record it in the county where it had been incorrectly recorded, just to clear up the record there.

(9) For purposes of this section, unless the context otherwise requires:(a) “Assuming party” means a person other than the original grantor who paid off the indebtedness on behalf of the original grantor.(b) “Current address” means the most recent address reflected in the records of a holder of the evidence of debt, a title insurance company licensed and qualified in Colorado , or a holder of the original evidence of debt that is a qualified holder, as defined in section 38-38-100.3 (20). If a holder of the evidence of debt, a title insurance company licensed and qualified in Colorado , or a holder of the original evidence of debt that is a qualified holder, as defined in section 38-38-100.3 (20), has no record of a current address, any requirement that a current address be provided shall be deemed satisfied by indicating that fact.(c) “Current owner” means a person other than the original grantor who currently owns the property and has either paid off or taken over the indebtedness on behalf of the original grantor.

38-39-103. Effect of release or partial release before maturity of evidence of debt - release is good as to recitals. (1) In any executed and recorded release or partial release of any deed of trust affecting the title to real estate in this state, whether or not such release is executed before the maturity of the indebtedness so secured, the recital of the following shall constitute evidence thereof, so as to give full effect to such release:(a) That the indebtedness secured by such deed of trust has been fully or partially paid; or(b) That the purpose of the deed of trust has been fully or partially satisfied.(2) Any release of deed of trust shall be good and valid as to the recitals therein, whether made to the original grantor of said deed of trust or to a subsequent purchaser of the property described in such release of deed of trust.

COMMENT: In other words, the release is binding with respect to the request made and executed by the public trustee. There is no provision for “un-releasing” property via the public trustee or for amending the contents of the release.

38-39-104. Satisfaction of mortgage.The lien of any mortgage encumbering property within the state of Colorado can be released only by the mortgagee executing a separate instrument of release executed under the formalities prescribed by the law regulating conveyances. All releases made prior to July 1, 1973, either on the mortgage or on the record of the mortgage, and signed by the mortgagee, shall have the same effect as a separate instrument of release legally executed by the mortgagee.

38-39-105. Removal of improvements from encumbered property.

(1) An owner of real property shall not remove any improvement therefrom without first obtaining the written consent of the holder of any lien recorded prior to October 1, 1990, and the holder of the indebtedness secured by the deed of trust or mortgage having the most senior lien which encumbers such real property. This section shall not apply where any such improvement is expressly excepted from such lien.(2) Any person who violates the provisions of subsection (1) of this section commits a class 2 misdemeanor and shall be punished as provided in section 18-1.3-501, C.R.S.

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38-39-106. Future advances. (1) Any mortgage may, by its terms, secure future advances up to a total maximum principal amount expressly set forth in such mortgage. Such mortgage shall be effective to secure payment of all advances, both obligatory and optional, up to the stated maximum principal amount to the same extent and with the same effect and priority as if such total maximum principal amount had been fully disbursed on or before the date such mortgage was recorded.(2) Such mortgage shall also secure, to the same extent and with the same effect and priority, the following additional amounts regardless of whether such additional amounts, when added to the principal amount of the indebtedness, exceed the maximum principal amount stated in the mortgage:(a) All increases in the principal amount that result from negative amortization or the addition of deferred interest;(b) All disbursements made for the payment of taxes, levies, or insurance with respect to the property subject to the mortgage or made to protect such property from waste, damage, or abuse;(c) If the mortgage or evidence of debt secured by the mortgage so provides, all reasonable expenses associated with collection of the indebtedness or foreclosure of the mortgage; and(d) Interest on any of the items specified in paragraphs (a) to (c) of this subsection (2) in accordance with the terms of the mortgage or the evidence of debt secured by the mortgage.(3) Subsection (1) of this section shall not apply to any subsequent advance against a mortgage instrument after a mortgagee has initially advanced principal up to the maximum amount stated in the mortgage, unless the mortgage instrument clearly states that it was made pursuant to a revolving credit arrangement.(4) This section shall have no application to the priority of general mechanics' liens arising pursuant to article 22 of this title, and the priority of such general mechanics' liens with respect to a mortgage which secures future advances shall be determined without reference to this section.

38-39-107. Form of written request for release of a deed of trust with production of the evidence of debt.

A written request to a public trustee made pursuant to section 38-39-102 (1) (a) to release a deed of trust with production of the original canceled evidence of debt may be in substantially the following form:

Original Note and Deed of Trust Returned to:When recorded return to:Prepared/Received by:REQUEST FOR FULL [ ] / PARTIAL [ ]RELEASE OF DEED OF TRUST AND RELEASEBY HOLDER OF THE EVIDENCE OF DEBT WITHPRODUCTION OF EVIDENCE OF DEBT PURSUANTTO § 38-39-102 (1) (a), COLORADO REVISED STATUTES___________________________ Date___________________________ Original Grantor (Borrower)______________________________________________________ Current Address of Original Grantor, Assuming Party, or Current Owner[ ] Check here is current address is unknown___________________________ Original Beneficiary (Lender)______________________________________________________ Date of Deed of Trust___________________________ Date of Recording and/or Re-Recording of Deed of Trust___________________________ Recording InformationCounty Rcpt. No. and/or Film No. and/or Book/Page No. and/or Torrens Reg. No.TO THE PUBLIC TRUSTEE OF COUNTY(The County of the Public Trustee who is the appropriate grantee to whom the above Deed of Trust should grant an interest in the property described in the Deed of Trust)PLEASE EXECUTE AND RECORD A RELEASE OF THE DEED OF TRUST DESCRIBED ABOVE. The indebtedness secured by the Deed of Trust has been fully or partially paid and/or the purpose of the Deed of Trust has been fully or partially satisfied in regard to the property encumbered by the Deed of Trust as described therein as to a full release or, in the event of a partial release, only that portion of the real property described as:_________________________________________________________(IF NO LEGAL DESCRIPTION IS LISTED THIS WILL BE DEEMED A FULL RELEASE.)Name and address of current holder of the EVIDENCE OF DEBT secured by deed of trust (lender)_________________________________________________________Name, title, and address of officer, agent, or attorney of current holder___________________________________________________________Signature Signature

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State of , County ofThe foregoing Request for Release was acknowledged before me on (Date) by* (Notary Seal)_______________________________Date Commission Expires*If applicable, insert title of officer and name of current holder____________________________________Notary Public Witness my hand and official sealRELEASE OF DEED OF TRUSTWHEREAS, the Grantor(s) named above, by Deed of Trust, granted certain real property described in the Deed of Trust to the Public Trustee of the County referenced above, in the State of Colorado, to be held in trust to secure the payment of the indebtedness referred to therein; andWHEREAS, the indebtedness secured by the Deed of Trust has been fully or partially paid and/or the purpose of the Deed of Trust has been fully or partially satisfied according to the written request of the current holder of the evidence of debt;NOW THEREFORE, in consideration of the premises and the payment of the statutory sum, receipt of which is hereby acknowledged, I, as the Public Trustee in the County named above, do hereby fully and absolutely release, cancel and forever discharge the Deed of Trust or that portion of the real property described above in the Deed of Trust, together with all privileges and appurtenances thereto belonging.___________________________________ Public Trustee____________________________________ Deputy Public Trustee(Public Trustee use only; use appropriate label)(Public Trustee's seal)(If applicable: Notary Seal)___________________________________________________________(If applicable, name and address of person creating new legal description as required by § 38-35-106.5, Colorado Revised Statutes.)

COMMENT: The format of a request for release made “with production” can be fairly flexible. The use of an older version of this form is acceptable as long as it includes enough information to index it to the deed of trust being released, is signed and acknowledged by the holder of the evidence of debt, and includes a request for the public trustee to release the deed of trust. Since there are no current requirements for the public trustee’s signature to be acknowledged, you may ignore that area if included in an old form.

38-39-108. Form of written request for release of a deed of trust without production of the evidence of debt.

A written request to a public trustee made pursuant to section 38-39-102 (1) (a) and (3) to release a deed of trust without production of the original canceled evidence of debt may be in substantially the following form:

Original Note and Deed of Trust Returned to:When recorded return to:Prepared/Received by:REQUEST FOR FULL [ ] / PARTIAL [ ]RELEASE OF DEED OF TRUST AND RELEASEBY HOLDER OF THE EVIDENCE OF DEBT WITHOUTPRODUCTION OF EVIDENCE OF DEBT PURSUANT TO§ 38-39-102 (1) (a) and (3), COLORADO REVISED STATUTES___________________________ Date___________________________ Original Grantor (Borrower)______________________________________________________ Current Address of Original Grantor, Assuming Party, or Current Owner[ ] Check here is current address is unknown___________________________ Original Beneficiary (Lender)______________________________________________________ Date of Deed of Trust___________________________ Date of Recording and/or Re-Recording of Deed of Trust___________________________ Recording InformationCounty Rcpt. No. and/or Film No. and/or Book/Page No. and/or Torrens Reg. No.TO THE PUBLIC TRUSTEE OF COUNTY(The County of the Public Trustee who is the appropriate grantee to whom the above Deed of Trust should grant an interest in the property described in the Deed of Trust)PLEASE EXECUTE AND RECORD A RELEASE OF THE DEED OF TRUST DESCRIBED ABOVE. The indebtedness secured by

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the Deed of Trust has been fully or partially paid and/or the purpose of the Deed of Trust has been fully or partially satisfied in regard to the property encumbered by the Deed of Trust as described therein as to a full release or, in the event of a partial release, only that portion of the real property described as:_________________________________________________________(IF NO LEGAL DESCRIPTION IS LISTED THIS WILL BE DEEMED A FULL RELEASE.)Pursuant to § 38-39-102 (3), Colorado Revised Statutes, in support of this Request for Release of Deed of Trust, the undersigned, as the holder of the evidence of debt secured by the Deed of Trust described above, or as a Title Insurance Company authorized to request the release of a Deed of Trust pursuant to § 38-39-102(3)(c), Colorado Revised Statutes, in lieu of the production or exhibition of the original evidence of debt with this Request for Release, certifies as follows:1. The purpose of the Deed of Trust has been fully or partially satisfied.2. The original evidence of debt is not being exhibited or produced herewith.3. It is one of the following entities (check applicable box): a. [ ] The holder of the original evidence of debt that is a qualified holder, as specified in § 38-39-102(3)(a), Colorado Revised Statutes, that agrees that it is obligated to indemnify the Public Trustee for any and all damages, costs, liabilities, and reasonable attorney fees incurred as a result of the action of the Public Trustee taken in accordance with this request for release; b. [ ] The holder of the evidence of debt requesting the release of a Deed of Trust without producing or exhibiting the original evidence of debt that delivers to the Public Trustee a corporate surety bond as specified in § 38-39-102(3)(b), Colorado Revised Statutes; or c. [ ] A title insurance company licensed and qualified in Colorado, as specified in § 38-39-102(3)(c), Colorado Revised Statutes, that agrees that it is obligated to indemnify the Public Trustee pursuant to statute as a result of the action of the Public Trustee taken in accordance with this request for release and that has caused the indebtedness secured by the deed of trust to be satisfied in full, or in the case of a partial release, to the extent required by the holder of the indebtedness.__________________________________________________Name and address of the holder of the evidence of debt secured by Deed of Trust (lender) or name and address of the Title Insurance Company authorized to request the release or a Deed of Trust_________________________________________________________Name, title, and address of officer, agent, or attorney of the holder of the evidence of debt secured by Deed of Trust (lender)___________________________________________________________Signature SignatureState of , County ofThe foregoing Request for Release was acknowledged before meon (Date) by* (Notary Seal)_______________________________ Date Commission Expires*If applicable, insert title of officer and name of current holder____________________________________Notary Public Witness my hand and official sealRELEASE OF DEED OF TRUSTWHEREAS, the Grantor(s) named above, by Deed of Trust, granted certain real property described in the Deed of Trust to the Public Trustee of the County referenced above, in the State of Colorado, to be held in trust to secure the payment of the indebtedness referred to therein; andWHEREAS, the indebtedness secured by the Deed of Trust has been fully or partially paid and/or the purpose of the Deed of Trust has been fully or partially satisfied according to the written request of the holder of the evidence of debt or Title Insurance Company authorized to request the release of the Deed of Trust;NOW THEREFORE, in consideration of the premises and the payment of the statutory sum, receipt of which is hereby acknowledged, I, as the Public Trustee in the County named above, do hereby fully and absolutely release, cancel and forever discharge the Deed of Trust or that portion of the real property described above in the Deed of Trust, together with all privileges and appurtenances thereto belonging.____________________________________ Public Trustee____________________________________ Deputy Public Trustee(Public Trustee use only; use appropriate label)(Public Trustee's seal)(If applicable: Notary Seal)___________________________________________________________(If applicable, name and address of person creating new legal description as required by § 38-35-106.5, Colorado Revised Statutes.)

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COMMENT: Generally speaking, variations on this form are not acceptable. Most older forms will refer to a different subsection 38-39-102(3.5) and will not provide the indemnification required under the current 38-39-102(3). Minor variations are acceptable, such as listing only the block under 38-39-102(3) that applies to this holder, and the release form must include enough information to index it to the deed of trust being released, be signed and acknowledged by the holder of the evidence of debt, and include a request for the public trustee to release the deed of trust.

38-39-109. When release of deed of trust is recorded.(1)(a) Except as provided in paragraph (b) of this subsection (1), when a release of deed of trust is presented to the county clerk and recorded for recording, the county clerk and recorder shall return the original release of a deed of trust to the original grantor, assuming party, or current owner using the current address for the original grantor, assuming party, or current owner provided to the public trustee pursuant to section 38-3-102 (1)(a)(IV), (3)(a)(II), (3)(b)(II), (3)(c)(II), or (5)(d).(b) The county clerk and recorder shall not be required to return the original release of a deed of trust as specified in paragraph (2) of this subsection (1) if the public trustee, in his or her discretion, has released the deed of trust as specified in section 38-39-102(1)(a)(IV) or if a current address is not provided as specified in section 38-39-102(9)(b).(2) If the original release is returned to the county clerk and recorder as undeliverable or unable to forward, the county clerk and recorder

shall maintain the original release pursuant to the policy of the office of the clerk and recorder.(3) Any original grantor, assuming party, or current owner seeking a copy of a release of a deed of trust after recording shall be subject to appropriate copy fees pursuant to section 30-1-103, C.R.S.

COMMENT: This section describes the clerk’s duties after receipt and recording of the release of deed of trust. It is the clerk’s job to send or maintain the original release. It should not be returned to the public trustee. Persons asking for copies of the release should be directed to the clerk and recorder.

38-39-201. Liens not to run over fifteen years.

(1) Except as provided in sections 38-39-202 and 38-39-204, any lien upon property created by a mortgage or deed of trust shall cease to be a lien fifteen years after the date on which the final payment or performance of the obligation secured thereby is due as shown by such mortgage or deed of trust recorded in the office of the county clerk and recorder of the county wherein the property is located.(2) If the date on which the final payment or performance is due cannot be determined from the information contained in the recorded mortgage or deed of trust, such date shall, for the purpose of this article, be considered to be the date of the recorded instrument or, if the instrument is undated, the date the instrument was first recorded, notwithstanding anything in any other instrument or any unrecorded instrument to the contrary.

COMMENT: This section describes the clerk’s duties after receipt and recording of the release of deed of trust. It is the clerk’s job to send or maintain the original release. It should not be returned to the public trustee. Persons asking for copies of the release should be directed to the clerk and recorder.

38-39-202. Lien extended - method. (1) The lien of a recorded mortgage or deed of trust may be extended without the written agreement of the owner of the property encumbered by such lien by an instrument in writing, signed by the owner of the obligation secured by such lien or by the person, firm, or corporation designated in such mortgage or deed of trust as the trustee for the owner of the obligation, such as a note or bond secured by such lien or by the successor in office of such named trustee. Such instrument shall clearly describe the mortgage or deed of trust, shall state the date to which the lien has been extended, and shall be recorded before the expiration of the fifteen-year period described in section 38-39-201 (1) in the office of the county clerk and recorder of the county wherein the property is located. The date to which such lien is extended by such instrument shall in no event be later than fifteen years after the recording date of such instrument.(2) Additional and further extensions may be recorded from time to time in accordance with the provisions of this section in order to extend the lien of such mortgage or deed of trust. The original extension and all additional and further extensions shall, in no event, extend the lien of the original mortgage or trust deed beyond a total of thirty years without the written agreement of the owner of the property encumbered by such lien. Each successive extension must be recorded during the time that such mortgage or deed of trust constitutes a lien under the terms of this article and before the expiration of the respective period for which the lien of such mortgage or deed of trust may have been extended in accordance with the terms of this article.(3) The lien of a recorded mortgage or deed of trust may be extended for so long as agreed, by an instrument in writing, signed by the owner of the obligation secured by such lien and the owner of the property encumbered by such lien and recorded in the office of the county clerk and recorder of the county in which such property is located.(4) The term "thirty years", as used in this section, means thirty years after the original maturity date of such mortgage or deed of trust.

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COMMENT: Again, this is outside the public trustee’s direct duties but is helpful information. The lender may unilaterally extend the deed of trust lien to no later than 15 years after recording of the extension if that extension is recorded within the 15-year period specified in 38-39-201. If the original extension is timely filed, the lender can file one or more extensions to a date no more than 30 years after the 15-year period specified in 201. With the consent of the borrower and lender, the lien may be extended for any length of time.

38-39-203. No release necessary.

No release or other instrument shall be necessary to discharge the lien of any recorded mortgage or deed of trust which has expired or ceased to be a lien as provided in sections 38-39-201 and 38-39-202, but nothing in this section shall be construed as affecting or preventing the execution of a release at any time.

COMMENT: The referenced sections are useful for explaining how a lien expires after a certain amount of time. There is nothing wrong with executing a release after this time if it is properly presented under 38-39-102. If the intent was to allow the public trustee to execute a release after this time despite a failure to comply with 38-39-102, presumably the law would say so.

38-39-204. Effect of notice of action on lien.

If, prior to the expiration of the period as defined in sections 38-39-201 and 38-39-202 during which any recorded mortgage or deed of trust constitutes a lien, there shall be filed in the office of the county clerk and recorder of the proper county a notice of an action pending to foreclose such lien or a notice of election and demand for sale, the lien created by such instrument shall continue until final disposition of the action or foreclosure proceeding.

COMMENT: The expiration of the deed of trust is extended by a foreclosure commenced before its expiration.

38-39-205. Action to be brought within fifteen years.No action shall be commenced to foreclose the lien of any mortgage or deed of trust, unless such action is commenced prior to the date on which such mortgage or deed of trust ceases to be a lien pursuant to sections 38-39-201 and 38-39-202.

COMMENT: If a deed of trust lien expires, no foreclosure action can be started on that lien.

38-39-206. Does not extend any lien.

This article shall not be construed as extending any lien or the right to bring or maintain any action for which a shorter period may be provided by law.

COMMENT: If there is some other provision under which the lien expires in less than the periods described in Sections 201 through 205, or which requires a foreclosure to begin before that time period expires, then the other provision controls.

38-39-207. Lien extinguished when action barred.

The lien created by any instrument shall be extinguished, regardless of any other provision in this article to the contrary, at the same time that the right to commence a suit to enforce payment of the indebtedness or performance of the obligation secured by the lien is barred by any statute of limitation of this state.

COMMENT: Expiration of the statute of limitations on the evidence of debt and any other debt or obligation secured by the deed of trust extinguishes the deed of trust here.

38-39-208. Action within seven years when in possession.

No action shall be commenced for any reason whatsoever to question or to set aside any foreclosure of any deed of trust, mortgage, or other lien, unless such action is commenced within seven years after the date of the vesting of title pursuant to such foreclosure.

COMMENT: Once seven years have passed since title vested, no one can challenge any aspect of a foreclosure. This drives the archiving requirement of current year + 7 years. After that time, the foreclosure documents are of purely historical interest.

38-39-209. Mortgages to United States. of 129


(1) Any mortgage, deed of trust, or other instrument executed by a corporation organized under the provisions of articles 40, 55, and 56 of title 7, C.R.S., and given to secure any indebtedness to the United States, or any agency or instrumentality thereof, which affects real or personal property, or both, and which is recorded in the real property records in any county in which such property is located or is to be located shall have the same force and effect as if such instrument were also recorded, filed, or indexed as provided by law in the proper office in such county as a mortgage of personal property. All after-acquired real or personal property of such corporation, described or referred to as being mortgaged or pledged in any such instrument, shall become subject to the lien thereof immediately upon the acquisition of such property by such corporation, whether or not such property was in existence at the time of the execution of such instrument.(2) Recordation of any such instrument shall constitute notice and otherwise have the same effect with respect to such after-acquired property as it has under the laws relating to recordation with respect to property owned by such corporation at the time of the execution of such instrument and therein described or referred to as being mortgaged or pledged thereby. The lien upon personal property of any such instrument shall, after recordation thereof, continue in existence and of record until the performance of the obligation secured thereby or the release or satisfaction thereof by the owner thereof.

OTHER RELEVANT PROVISIONS

24-70-101. [Legal Publications] Definitions

As used in this part 1, unless the context otherwise requires: (1) "Legal notice" or "advertisement" means any notice or other written matter required to be published in a newspaper by any law of this state, or by the ordinances of any city or town, or by the order of any court of record of this state. (2) "Privately supported legal notice or advertisement" means any legal notice or advertisement which is required by federal, state, or local law or court order which is paid for by a person or entity other than a governmental entity either directly or by direct, specific reimbursement to the governmental entity. (3) "Publicly supported legal notice or advertisement" means any legal notice or advertisement which is required by federal, state, or local law or court order which is paid for by a governmental entity. (4) "Published" means a newspaper maintains an office in the county to gather news, sell advertising, or conduct the general business of newspaper publications.

COMMENTS: 1. The definitions address the terms of legal notice, the payment of legal notice, and the location of the newspaper office. The first three definitions are taken at face value. The fourth definition raises concerns for counties in which no newspaper meets the definition. This issue is addressed in 24-70-103. 2. Publication of legal notices is required to appear in newspapers. At this time, other periodicals such as magazines and news web sites do not qualify.

24-70-102. Legal publications

Every newspaper printed and published daily, or daily except Sundays and legal holidays, or on each of any five days in every week excepting legal holidays and including or excluding Sundays shall be considered and held to be a daily newspaper; every newspaper printed and published at regular intervals three times each week shall be considered and held to be a triweekly newspaper; every newspaper printed and published at regular intervals twice each week shall be considered and held to be a semiweekly newspaper; and every newspaper printed and published at regular intervals once each week shall be considered and held to be a weekly newspaper. No publication, no matter how frequently published, shall be considered a legal publication unless it has been admitted to the United States mails with periodicals mailing privileges.

COMMENTS: 1. To be considered a legal publication, that is, a publication in which legal notices may be published, it must have periodical mailing privileges with the United States Postal Service. A publisher must complete the Application for Periodicals Mailing Privileges. Requirements include the intent to publish with continuity from issue to issue, regularly, from a known office with posted hours, and in the form of printed sheets. A fee of several hundred dollars accompanies the application. 2. In this context, the designation of daily, triweekly, semiweekly, and weekly publications is to confirm these publications as allowable if they meet further requirements. Note the absence of the terms biweekly and monthly. Less than weekly publications do not qualify for legal notice purposes.

24-70-103. Requisites of legal newspaper

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(1) Any and every legal notice or advertisement shall be published only in a daily, a triweekly, a semiweekly, or a weekly newspaper of general circulation and printed or published in whole or in part in the county in which such notice or advertisement is required to be published, except as provided in this section. The newspaper, if published triweekly, semiweekly, or weekly, shall have been so published in such county, except as provided in this section, continuously and uninterruptedly during the period of at least fifty-two consecutive weeks next prior to the first issue thereof containing any such notice or advertisement; and the newspaper, if published daily, shall have been so published in such county, uninterruptedly and continuously, during the period of at least six months next prior to the first issue thereof containing any such notice or advertisement. In the case of a municipality having territory in two counties, each of which counties has one or more legal newspapers within the municipality, the publication by such municipality of its legal notices and advertisements in one of such newspapers shall be construed as valid publication under this part 1.

COMMENT: A newspaper may be published at least weekly but it must have a history of continuous publication. This makes sense. One of the objectives of due diligence is to make reasonable effort to notify the stakeholders of an event. In meeting that objective, a publication becomes the known source for legal notices. A startup publication may not have the endurance needed and does not have recognition for being a source of legal notices.

(2) The mere change in the name of any newspaper or the removal of the principal business office or seat of publication of any newspaper from one place to another in the same county shall not break or affect the continuity in the publication of any such newspaper if the same is in fact continuously and uninterruptedly printed or published within such county. A newspaper shall not lose its rights as a legal publication if it fails to publish one or more of its issues by reason of a strike, transportation embargo or tie-up, or other casualty beyond the control of the publishers. Any legal notice which fails of publication for the required number of insertions by reason of a strike shall not be declared illegal if publication has been made in one issue of the publication.

COMMENTS: 1. This section deals with two issues: a) change of name or location of office of the publication and b) failure to publish because of external circumstances. 2. Changing the name or location of the business office within the county does not affect meeting continuity of publication requirements as long as publication was actually done. 3. Strikes, embargoes, and other casualties beyond control of the publisher do not affect the determination as a legal publication. 4. If there is such an event that causes legal notice to fail continuity, the notice shall not be declared illegal.

(3) If in any county in this state no newspaper has been published for the prescribed period at the time when any such notice or advertisement is required to be published or if there is no newspaper published therein, such notice or advertisement may be published in any newspaper published in whole or in part in an adjoining county and having a general circulation in whole or in part in said county having no newspaper published therein. If there is no newspaper in any adjoining county that has been published for the prescribed period at the time when any such notice or advertisement is required to be published, a required notice or advertisement may be published in a newspaper having general circulation within the county.

COMMENT: If there is no newspaper within a county that meets the requirements of 24-70-102 and this section, a newspaper in an adjoining county may be used. If there is none in an adjoining county, a newspaper with general circulation within the county may be used.

24-70-105. Proof of publication

Proof of the publication of any such legal notice or advertisement may be made by the affidavit of the printer, editor, publisher, or proprietor of the newspaper in which the publication is made or by any other competent person who has personal knowledge of the essential facts, which affidavit, in addition to the other matters required by law to be set forth therein, shall state that such notice or advertisement was published in a newspaper duly qualified for that purpose.

COMMENTS: 1. The affidavit of publication is signed by specified personnel of the publisher and notarized. Standard process requires payment for the publication before an affidavit will be signed. 2. Proof of publication is kept with the foreclosure files for 7 years after expiration of the current year. The printed notice of sale is a permanent record at this time.. 99

24-70-106. Competency of newspapers - publication periods construed

(1) Except as otherwise provided by law in express terms or by necessary implication, daily, weekly, semiweekly, and triweekly newspapers shall all be equally competent as the media for the publication of all legal notices and advertisements. Except where the publication of any such legal notice or advertisement at intervals of less than one week is required by law, publication once each week on the same weekday in any such daily, weekly, semiweekly, or triweekly newspaper for the required number of times shall constitute publication in accordance with the law. (2) For the purpose of defining and clarifying ambiguities in the various statutes requiring the publication of legal notices and advertisements, but not for the purpose of increasing any period of publication or the number of publications required by any statute, the

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meaning and intent of any law governing the publication of legal notices and advertisements, except as otherwise expressly provided, is declared to be as follows, where publication is required for: (a) Ten days, publication once each week for three successive weeks in any daily, weekly, semiweekly, or triweekly newspaper shall be sufficient; (b) Two weeks, publication once each week for three successive weeks in any daily, weekly, semiweekly, or triweekly newspaper shall be sufficient; (c) Three weeks, publication once each week for four successive weeks in any daily, weekly, semiweekly, or triweekly newspaper shall be sufficient; (d) Four weeks, publication once each week for five successive weeks in any daily, weekly, semiweekly, or triweekly newspaper shall be sufficient; (e) Five weeks, publication once each week for six successive weeks in any daily, weekly, semiweekly, or triweekly newspaper shall be sufficient; (f) Thirty days, publication once each week for six successive weeks in any daily, weekly, semiweekly, or triweekly newspaper shall be sufficient; (g) More than thirty days or five weeks, publication once each week in any daily, weekly, semiweekly, or triweekly newspaper for a period such that the interval elapsing between the first and last publication shall be equal to the period of publication prescribed by law shall be sufficient.

COMMENT: This section gives a rule of thumb for meeting publication requirements. For instance, if a notice is required to be published for ten days, the publication must appear once each week for three weeks. The days are counted from the first day of publication to the last day of publication.

24-70-107. Rates for legal publications

(1) (a) On or after January 1, 1993, for all publicly supported legal notices or advertisements published in newspapers, the rate paid for the first insertion of such notice shall not exceed forty-four cents for each single-column line of six-point type and shall not exceed thirty-two cents per line for each subsequent insertion. If the notice is set in larger type, the rate shall be prorated. Regardless of the size of type the notice is set in, the rates specified in this paragraph (a) are based on a single column measuring ten pica ems wide. If the column width is either wider or narrower for a single column, the rate per line shall be prorated on the ten pica em width. (b) All emblems, display headings, rule work, and necessary blank space shall be considered to be solid type. For the purpose of calculating the charge for the items enumerated in this paragraph (b) only, the rate shall not exceed the line rate charge figured at twelve lines per inch for each column inch or a proportional amount for fractions of an inch. (2) (a) On or after January 1, 1993, for all privately supported legal notices or advertisements, the rate paid shall not exceed the newspaper's local classified display line rate which is offered to commercial customers and shall include the same frequency and volume discounts. The legal publication rate shall be published in the newspaper's rate card. (b) Notwithstanding any statute to the contrary, if any local government fee set by statute is too low to permit the local government to recover the full cost of publishing a privately supported legal notice or advertisement, the local government may adjust the fee by the actual dollar amount necessary to recover the full cost of the publication. (3) Any contract providing for payment of a notice at a lesser sum than is provided in this section shall be valid. (4) Upon request by the party placing a legal publication, the newspaper shall minimize the space required for publication of a valid and readable notice, but in no case shall the type be less than six points.

COMMENT: This section sets maximum charges by newspapers for legal notices.

24-70-108. Designation of legal newspaper

In all cases and proceedings brought in courts of record in this state and in foreclosure proceedings through the public trustee wherein the law requires the publication of a legal notice or advertisement or said legal notice or advertisement is published by order of the court in compliance with the law or rules of procedure of such court, the party upon whose motion or application or the beneficiary under the deed of trust or the legal holder of an indebtedness secured by a deed of trust shall have the right to designate the newspaper in which such legal notice or advertisement shall be published. Said newspaper shall be a legal newspaper as defined by law and shall be published in the county where such publication is required to be made by law or by the rules of civil procedure or rules of the court applicable thereto.

COMMENT: In the case of foreclosures, the attorney for the holder of the indebtedness has the right to designate the newspaper in which the legal notices for that file are published. The newspaper must be considered a legal newspaper in the county where the property to be sold is located.

24-70-109. Legal notices - contents - requirements in the case of a foreclosure sale or a sale by a public trustee (1) All legal notices which are published to advertise sales of real property by a public trustee under a deed of trust or an execution sale resulting from the foreclosure of a mortgage shall contain a statement that the lien foreclosed may not be a first lien, which statement shall be printed in bold-faced type.

COMMENT: Says what it means and means what it says.

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29-1-101. Short title [Local Government Budget Law of Colorado]

This part 1 shall be known and may be cited as the "Local Government Budget Law of Colorado".

29-1-102. Definitions

As used in this part 1, unless the context otherwise requires: (1) "Appropriation" means the authorization by ordinance or resolution of a spending limit for expenditures and obligations for specific purposes. (2) "Basis of budgetary accounting" means any one of the following methods of measurement of timing when revenue and other financing sources and expenditures and other financing uses are recognized for budget purposes: (a) Cash basis (when cash is received and disbursed); (b) Modified accrual basis (when revenue and other financing sources are due and available and when obligations or liabilities are incurred for expenditures and other financing uses, except for certain stated items such as, but not limited to, prepaids, inventories of consumable goods, and interest payable in a future fiscal year); or (c) Encumbrance basis (the modified accrual basis, but including the recognition of encumbrances). (3) "Budget" means the complete estimated financial plan of the local government. (4) "Budget year" means the ensuing fiscal year. (5) "Certified" means a written statement by a member of the governing body or a person appointed by the governing body that the document being filed is a true and accurate copy of the action taken by the governing body. (6) "Division" means the division of local government in the department of local affairs. (7) "Encumbrance" means a commitment related to unperformed contracts for goods or services. (8) (a) "Expenditure" means any use of financial resources of the local government consistent with its basis of accounting for budget purposes for the provision or acquisition of goods and services for operations, debt service, capital outlay, transfers, or other financial uses. (b) "Expenditure" shall not include the payment or transfer of moneys by the office of the public trustee created in section 38-37-101, C.R.S., that are received from and required to be paid to another person or entity pursuant to the requirements of article 37, 38, or 39 of title 38, C.R.S., including, but not limited to, recording fees and publication costs pursuant to sections 38-38-101 and 38-39-102, C.R.S., and transfers of excess funds to the county treasurer made pursuant to section 38-37-104 (3), C.R.S. (9) "Fiscal year" means the period commencing January 1 and ending December 31; except that "fiscal year" may mean the federal fiscal year for water conservancy districts which have contracts with the federal government. (10) "Fund" means a fiscal and accounting entity with a self-balancing set of accounts in which cash and other financial resources, all related liabilities and residual equities or balances, and changes therein are recorded and segregated to carry on specific activities or to attain certain objectives in accordance with special regulations, restrictions, or limitations. (11) "Fund balance" means the balance of total resources available for subsequent years' budgets consistent with the basis of accounting elected for budget purposes. (12) "Governing body" means a board, council, or other elected or appointed body in which the legislative powers of the local government are vested. (13) "Local government" means any authority, county, municipality, city and county, district, or other political subdivision of the state of Colorado; any institution, department, agency, or authority of any of the foregoing; and any other entity, organization, or corporation formed by intergovernmental agreement or other contract between or among any of the foregoing. The office of the county public trustee shall be deemed an agency of the county for the purposes of this part 1. "Local government" does not include the Colorado educational and cultural facilities authority, the university of Colorado hospital authority, collegeinvest, the Colorado health facilities authority, the Colorado housing and finance authority, the Colorado agricultural development authority, the Colorado sheep and wool authority, the Colorado beef council authority, the Colorado horse development authority, the fire and police pension association, any public entity insurance or investment pool formed pursuant to state law, any county or municipal housing authority, any association of political subdivisions formed pursuant to section 29-1-401, or any home rule city or town, home rule city and county, cities and towns operating under a territorial charter, school district, or junior college district. (14) "Object of expenditure" means the classification of fund data by character of expenditure. "Object of expenditure" includes, but is not limited to, personal services, purchased services, debt service, supplies, capital outlay, grants, and transfers. (15) "Objection" means a written or oral protest filed by an elector of the local government. (16) "Revenue" means all resources available to finance expenditures. (17) "Spending agency", as designated by the local government, means any office, unit, department, board, commission, or institution which is responsible for any particular expenditures or revenues.

COMMENTS: The particularly interesting portions of this section are the following. 1. (8)(b) specifically excludes as “expenditures” money that the public trustee is passing through to another party. It calls out two of the specific fees and costs under 38-37-104(1)(b)(X) but would include all other costs under that subparagraph. It also calls out the excess revenue transferred quarterly under 38-37-104(3) as NOT an expenditure. The language also clearly includes the “custodial funds” held from the proceeds of a cure, sale, or redemption under

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38-37-113(2). Your expenditures are the money the office pays in salary and benefits for the public trustee and any employees, as well as the cost of association dues, travel, and office supplies dedicated to public trustee use that were not supplied by the Board of County Commissioners under 38-37-102(3). 2. Because (16) defines “revenue” as the money used to finance expenditures, the payment of money for a sale, cure, or redemption does not count as revenue. Also, money charged and received that will be used to pay for recordings, publications, and other expenses allowed under 38-37-104(1)(b)(X) does not count as revenue. While the money ultimately transferred to the treasurer is not an expenditure, the fees received that make up that money is still “revenue” because it could have been used to finance expenditures. 3. (13) defines the public trustee office specifically as an “agency” of the county, thus fitting it under the definition of a “local government.” This apparently is done because most entities designated as “offices,” such as the offices of elected officials, fit under the definition of “spending agency” in (17). While the public trustee is an “office,” for budgeting purposes it acts as if it were an “agency,” and thus a “local government.” 4. (13) also clearly indicates that local governments can be nested in one another. A local government may have subdivisions that are also local governments.

29-1-103. Budgets required

(1) Each local government shall adopt an annual budget. To the extent that the financial activities of any local government are fully reported in the budget or budgets of a parent local government or governments, a separate budget is not required. Such budget shall present a complete financial plan by fund and by spending agency within each fund for the budget year and shall set forth the following: (a) All proposed expenditures for administration, operations, maintenance, debt service, and capital projects to be undertaken or executed by any spending agency during the budget year; (b) Anticipated revenues for the budget year; (c) Estimated beginning and ending fund balances; (d) The corresponding actual figures for the prior fiscal year and estimated figures projected through the end of the current fiscal year, including disclosure of all beginning and ending fund balances, consistent with the basis of accounting used to prepare the budget; (e) A written budget message describing the important features of the proposed budget, including a statement of the budgetary basis of accounting used and a description of the services to be delivered during the budget year; and (f) Explanatory schedules or statements classifying the expenditures by object and the revenues by source.

COMMENTS: 1. Not every local government actually must adopt its own budget – if the local government is a subset of “parent” local government, its budget may be included as part of the “parent” local government’s budget. This is how many public trustee offices handled their budget prior to the law that took effect in 2012. The new 38-37-104(6) specifically requires the office to adopt its own budget. 2. It is extremely unlikely that any public trustee would designate a spending agency subordinate to it, or have more than one “fund” for operational revenue and expenditures. 3. It is unlikely that any public trustee office will have expenditures for maintenance, debt service, or capital projects. 4. Revenues are extremely difficult to predict for the public trustee office. Most expenditures are also difficult to predict with certainty, as they are based on the amount of work performed.5. A sample budget message is Sample Budget Message

(2) No budget adopted pursuant to this section shall provide for expenditures in excess of available revenues and beginning fund balances.

COMMENT: Your initial budget must balance, or show a surplus, after taking into account the money available in the reserve established under 38-37-104(3).

(3) (a) The general assembly finds and declares that the use of lease-purchase agreements by local governments creates financial obligations of those governments and that the disclosure of such obligations is in the public interest and is a matter of statewide concern. (b) In addition to the governmental entities included in the definition of "local government" in section 29-1-102, the provisions of this subsection (3) shall apply to every home rule city, home rule city and county, school district, and junior college district. (c) As used in this subsection (3), "lease-purchase agreement" means a capital lease as defined in the generally accepted accounting principles issued by the governmental accounting standards board that the controller prescribes for the state as specified in section 24-30-202 (12), C.R.S. (d) (I) The budget adopted by every local government shall separately set forth each of the following: (A) The total amount to be expended during the ensuing fiscal year for payment obligations under all lease-purchase agreements involving real property; (B) The total maximum payment liability of the local government under all lease-purchase agreements involving real property over the entire terms of such agreements, including all optional renewal terms; (C) The total amount to be expended during the ensuing fiscal year for payment obligations under all lease-purchase agreements other than those involving real property;

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(D) The total maximum payment liability of the local government under all lease-purchase agreements other than those involving real property over the entire terms of such agreements, including all optional renewal terms. (II) Each budget required to be filed pursuant to section 29-1-113 shall include a supplemental schedule that contains the information described in this paragraph (d). (e) (I) No local government shall enter into any lease-purchase agreement whose duration, including all optional renewal terms, exceeds the weighted average useful life of the assets being financed. In the case of a lease-purchase agreement involving both real property and other property, the lease-purchase agreement shall provide that the real property involved shall be amortized over a period not to exceed its weighted average useful life and the other property shall be separately amortized over a period not to exceed its weighted average useful life. This provision shall not prevent a local government from releasing property from a lease-purchase agreement pursuant to an amortization schedule reflecting the times when individual pieces of property have been amortized. (II) Nothing contained in this paragraph (e) shall be construed to apply to any lease-purchase agreement entered into prior to April 9, 1990.

COMMENT: It is extremely unlikely that the public trustee office would be involved in a lease-purchase agreement, especially since the public trustee office does not have the statutory authority to own real property.

29-1-104. By whom budget prepared

The governing body of each local government shall designate or appoint a person to prepare the budget and submit the same to the governing body.

COMMENTS: 1. When acting as its own local government, the public trustee office has a governing body of one person. This is odd, but allowed under the definition in 29-1-102(12). Any external ramifications of being a governing body are limited by the definitions here being applicable strictly within the context of the Local Government Budget Law.104

29-1-105. Budget estimates

On or before a date to be determined by the governing body of each local government, all spending agencies shall prepare and submit to the person appointed to prepare the budget estimates of their expenditure requirements and their estimated revenues for the budget year, and, in connection therewith, the spending agency shall submit the corresponding actual figures for the last completed fiscal year and the estimated figures projected through the end of the current fiscal year and an explanatory schedule or statement classifying the expenditures by object and the revenues by source. In addition to the other information required by this section, every office, department, board, commission, and other spending agency of any local government shall prepare and submit to the person appointed to prepare the budget the information required by section 29-1-103 (3) (d). No later than October 15 of each year, the person appointed to prepare the budget shall submit such budget to the governing body.

COMMENTS: 1. The applicable deadline for you to draft the budget estimates for yourself is October 15, though there is no penalty for being late. You are unlikely to having any spending agencies needing to report to you. 2. It would be courteous to provide the budget estimate to the Board of County Commissioners by October 15 for review. The only part of the public trustee office budget that relates to the county budget for the same fiscal year is the cost of office supplies under 38-37-102(3). Any excess revenue generated during the budgeted fiscal year will not be transferred to the county General Fund until the following fiscal year.

29-1-106. Notice of budget

(1) Upon receipt of the proposed budget, the governing body shall cause to be published a notice containing the following information: (a) The date and time of the hearing at which the adoption of the proposed budget will be considered; (b) A statement that the proposed budget is available for inspection by the public at a designated public office located within the boundaries of the local government, or, if no public office is located within such boundaries, the nearest public office where the budget is available; and (c) A statement that any interested elector of the local government may file any objections to the proposed budget at any time prior to the final adoption of the budget by the governing body.

COMMENT: A sample publication: Sample Budget Publication

(3) (a) For any local government whose proposed budget is more than fifty thousand dollars, the notice required by subsection (1) of this section shall be published one time in a newspaper having general circulation in the local government. (b) Any local government whose proposed budget is fifty thousand dollars or less shall cause copies of the notice required by subsection (1) of this section to be posted in three public places within the jurisdiction of such local government in lieu of such publication.

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COMMENT: If you are anticipating expenditures to be less than $50,000, you only need to physically post the notice in 3 locations. It would be appropriate for the public places to be somewhat dispersed and in areas likely to be frequented by citizens interested in government. Otherwise, the notice should be published once, most likely in the same publication you use for foreclosure notices under 38-38-103(5). If you use multiple publications for the foreclosure notices, it may be good policy to publish in each.

29-1-107. Objections to budget

Any elector of the local government has the right to file or register his protest with the governing body prior to the time of the adoption of the budget.

COMMENTS: 1. “Objection” under 29-1-102(15) may be oral or written. The objection may be filed during the period prior to the budget hearing, at the budget hearing, or during any time after the budget hearing during which other objections are still being considered prior to adoption. 2. 29-1-108(1) does not require you to make any changes based on these objections. 3. “Elector” is here undefined but would mean someone registered to vote in your county or someone eligible to be registered to vote in your county. It would probably be inappropriate to reject a filed protest based on someone not being an elector, but the person’s status could be taken into consideration.

29-1-108. Adoption of budget - appropriations - failure to adopt

(1) The governing body of the local government shall hold a hearing to consider the adoption of the proposed budget, at which time objections of the electors of the local government shall be considered. The governing body shall revise, alter, increase, or decrease the items as it deems necessary in view of the needs of the various spending agencies and the anticipated revenue of the local government. Adoption of the proposed budget shall be effective only upon an affirmative vote of a majority of the members of the governing body.

COMMENTS: 1. The hearing is the final public opportunity for objections to be raised against a proposed budget. A sample resolution adopting the budget and also appropriating the funds, along with the attachments required under 29-1-113, is: Sample Resolution for Adopting the Budget 2. The question of appropriations, detailed in the rest of this subsection, is unclear. The paragraphs below link to appropriate to tax dollars received from the mill levy. Since your funds are fee-based, the preambles to these paragraphs don’t apply. It is probably best to include language in your budget resolution that appropriates the funds.

(2) Before the mill levy is certified pursuant to section 39-1-111 or 39-5-128, C.R.S., the governing body shall enact an ordinance or resolution adopting the budget and making appropriations for the budget year. The amounts appropriated shall not exceed the expenditures specified in the budget. Appropriations shall be made by fund or by spending agencies within a fund, as determined by the governing body. Changes to the adopted budget or appropriation shall be made in accordance with the provisions of section 29-1-109. (3) If the governing body fails to adopt a budget before certification of the mill levy as provided for in subsection (2) of this section, then ninety percent of the amounts appropriated in the current fiscal year for operation and maintenance expenses shall be deemed reappropriated for the purposes specified in such last appropriation ordinance or resolution. (4) If the appropriations for the budget year have not been made by December 31 of the current fiscal year, then ninety percent of the amount appropriated in the current fiscal year for operation and maintenance expenses shall be deemed reappropriated for the budget year. (5) Notwithstanding any other provision of law, the adoption of the budget, the appropriation of funds, and the certification of the mill levy shall be effective upon adoption. (6) All unexpended appropriations, or unencumbered appropriations if the encumbrance basis of budgetary accounting is adopted, expire at the end of the fiscal year.

29-1-109. Changes to budget - transfers - supplemental appropriations

(1) (a) If, after adopting the budget and making appropriations, the governing body of a local government deems it necessary, it may transfer appropriated moneys between funds or between spending agencies within a fund, as determined by the original appropriation level, in accordance with the procedures established in subsection (2) of this section. (b) If, after adoption of the budget, the local government receives unanticipated revenues or revenues not assured at the time of the adoption of the budget from any source other than the local government's property tax mill levy, the governing body may authorize the expenditure of such funds by enacting a supplemental budget and appropriation. (c) In the event that revenues are lower than anticipated in the adopted budget, the governing body may adopt a revised appropriation ordinance or resolution as provided in section 29-1-108.

COMMENTS:

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1. Another reason to not have multiple “funds” or spending agencies is that you cannot move money from one to another without a supplemental hearing. 2. Additional revenues only require a supplemental hearing if you need to use those revenues to increase expenditures. If the expenditures do not increase, the additional revenues will simply go into the excess revenue described in 38-37-104(3). But if, for example, releases increase so much that you must hire another person who was not budgeted, you would need a new hearing since 29-1-110 forbids spending in excess of appropriations. You may avoid the need for such a hearing by budgeting for possible increased work as long as you are sure to only spend the money if actual revenue supports it. 3. If revenues are lower than expected, you may reduce your budget so that you cannot spend the funds you do not have. This is more applicable to a governing body that oversees several spending agencies which are competing for funds. As a small office, you need only be certain that your actual expenditures do not exceed your actual revenues after they are supplemented from the reserve fund. You need not formally limit your ability to do this.

(2) (a) Any transfer, supplemental appropriation, or revised appropriation made pursuant to this section shall be made only by ordinance or resolution which complies with the notice provisions of section 29-1-106. (b) For transfers, such ordinance or resolution shall set forth in full the amounts to be transferred and shall be documented in detail in the minutes of the meeting of the governing body. A certified copy of such ordinance or resolution shall be transmitted immediately to the affected spending agencies and the officer or employee of the local government whose duty it is to draw warrants or orders for the payment of money and to keep the record of expenditures as required by section 29-1-114. A certified copy of such ordinance or resolution shall be filed with the division. (c) For supplemental budgets and appropriations, such ordinance or resolution shall set forth in full the source and amount of such revenue, the purpose for which such revenues are being budgeted and appropriated, and the fund or spending agency which shall make such supplemental expenditure. A certified copy of such ordinance or resolution shall be filed with the division.

COMMENT: A supplemental budget hearing follows the same process as the original.

29-1-110. Expenditures not to exceed appropriation

(1) During the fiscal year, no officer, employee, or other spending agency shall expend or contract to expend any money, or incur any liability, or enter into any contract which, by its terms, involves the expenditures of money in excess of the amounts appropriated. Any contract, verbal or written, made in violation of this section shall be void, and no moneys belonging to a local government shall be paid on such contract. (2) Multiple-year contracts may be entered into where allowed by law or if subject to annual appropriation.

COMMENT: You may not spend more money than you appropriated in your budget without formally revising the budget under 29-1-109.

29-1-111. Contingencies

In cases of emergency which could not have been reasonably foreseen at the time of adoption of the budget, the governing body may authorize the expenditure of funds in excess of the appropriation by ordinance or resolution duly adopted by a majority vote of such governing body at a public meeting. Such ordinance or resolution shall set forth the facts concerning such emergency and shall be documented in detail in the minutes of the meeting of such governing body at which such ordinance or resolution was adopted. A certified copy of such ordinance or resolution shall be filed with the division.

COMMENT: It is difficult to imagine an “emergency” that would require the expenditure of additional funds without going through the process described in 29-1-109.

29-1-112. Payment for contingencies

In case of an emergency and the passage of an ordinance or resolution authorizing additional expenditures in excess of the appropriation as provided in section 29-1-111 and if there is money available for such excess expenditure in some other fund or spending agency which will not be needed for expenditures during the balance of the fiscal year, the governing body shall transfer the available money from such fund to the fund from which the excess expenditures are to be paid. If available money which can be so transferred is not sufficient to meet the authorized excess expenditure, then the governing body may obtain a temporary loan to provide for such excess expenditures. The total amount of the temporary loan shall not exceed the amount which can be raised by a two-mill levy on the total assessed valuation of the taxable property within the limits of the local government of such governing body.

COMMENT: This is unlikely to apply because you are unlikely to have such an emergency. It is not clear how you could obtain such a loan since the public trustee cannot raise a levy.

29-1-113. Filing of budget

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(1) No later than thirty days following the beginning of the fiscal year of the budget adopted pursuant to section 29-1-108, the governing body shall cause a certified copy of such budget, including the budget message, to be filed in the office of the division. Copies of such budget and of ordinances or resolutions authorizing expenditures or the transfer of funds shall be filed with the officer or employee of the local government whose duty it is to disburse moneys or issue orders for the payment of money.

COMMENT: You must file the budget with the division of local government in the department of local affairs. Currently, the division accepts the budget as either a stand-alone filing by the public trustee or as part of the filing done by the county.

(2) Notwithstanding the provisions of section 29-1-102 (13), budgets shall be filed with the division by home rule cities, cities and counties, and towns and cities operating under a territorial charter for the purpose of information and research.

COMMENT: This applies even if your county is home rule (Denver, Broomfield, Weld, Pitkin). (3) If the governing body of a local government fails to file a certified copy of the budget with the division as required by this section, the division, after notice to the affected local government, may notify any county treasurer holding moneys of the local government generated pursuant to the taxing authority of such local government and authorize the county treasurer to prohibit release of any such moneys until the local government complies with the provisions of this section.

COMMENT: This enforcement of failure to file the budget would be difficult to enact since the public trustee is generally not spending tax money. The division does not have the power to limit the release of fee money. 29-1-115 offers a stronger reason to comply.

29-1-114. Record of expenditures

The officer or employee of the local government whose duty it is to disburse moneys or issue orders for the payment of money shall keep in his office a record showing the amounts authorized by the appropriation and the expenditures drawn against the same and also a record of the transfer of moneys from one fund to another and of any authorized additional expenditures as provided in section 29-1-111. Such record shall be kept so that it will show at all times the unexpended balance in each of the appropriated funds or spending agencies. Such officer or employee shall report on such record as may be required by the governing body. No such officer or employee shall disburse any moneys or issue orders for the payment of money in excess of the amount available as shown by said record or report.

COMMENT: You must track your spending against the budget and not exceed its limits.

29-1-115. Violation is malfeasance – removal

Any member of the governing body of any local government or any officer, employee, or agent of any spending agency who knowingly or willfully fails to perform any of the duties imposed upon him by this part 1 or who knowingly and willfully violates any of its provisions is guilty of malfeasance in office, and, upon conviction thereof, the court shall enter judgment that such officer so convicted shall be removed from office. Any elector of the local government may file an affidavit regarding suspected malfeasance with the district attorney, who shall investigate the allegations and prosecute the violation if sufficient cause is found. It is the duty of the court rendering any such judgment to cause immediate notice of such removal to be given to the proper officer of the local government so that the vacancy thus caused may be filled.

COMMENT: Failure to adopt the budget, follow its limitations, or to follow the steps along the way is a felony. If any “elector” files a complaint with the District Attorney, the DA is required to investigate. Penalty upon conviction is removal from office. Even if acquitted, the publicity would be a problem for trying to remain in office for another term. Do your best to comply with the law.

38-13-101. Short title [Unclaimed Property Act]

This article shall be known and may be cited as the "Unclaimed Property Act".

38-13-102. Definitions and use of terms

As used in this article, unless the context otherwise requires: (1) "Administrator" means the state treasurer. (2) "Apparent owner" means the person whose name appears on the records of the holder as the person entitled to property held, issued, or owing by the holder. (6) "Holder" means: (a) A person, wherever organized or domiciled, which is: (I) In possession of property belonging to another; (II) A trustee; or (III) Indebted to a person on an obligation; (b) The public employees' retirement association.

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(7) (a) "Intangible property" includes: (I) Moneys, checks, drafts, deposits, interest, dividends, and income; (7.5) "Item" means: (a) In regard to intangible property, the total of all accounts, credit balances, deposits, or other forms of intangible property held under the name of any one apparent owner; except that, if the same apparent owner owns intangible property of different types or classes that cannot practicably be handled or accounted for at the same time or in the same way, each such type or class may be considered a separate item; (b) In regard to tangible personal property, the total of all such property held under the name of any one apparent owner. (8) "Last-known address" means a description of the location of the apparent owner sufficient for the purpose of the delivery of mail. (9) "Owner" means a depositor in the case of a deposit, a beneficiary in case of a trust other than a deposit in trust, a creditor, claimant, or payee in the case of other intangible property, or a person having a legal or equitable interest in property subject to this article or his legal representative. (10) "Person" means an individual, business association, state or other government, governmental subdivision or agency, public corporation, public authority, estate, trust, two or more persons having a joint or common interest, or any other legal or commercial entity. (11) "Verify" means the signing of an instrument, which signing constitutes the affirmation or acknowledgment of the person signing the instrument, under penalties of perjury, that the facts stated in the instrument are true and which signing is made before a person who is a notary public or who is authorized by the law of the place of execution to take acknowledgments or to administer oaths.

38-13-108.2. Property held by courts and public agencies

(1) Except as set forth in subsection (2) of this section, intangible property held for the owner by a court, state or other government, governmental subdivision or agency, public corporation, or public authority which remains unclaimed by the owner for more than one year after becoming payable or distributable is presumed abandoned.

COMMENT: This language is also used in 38-38-114. This would include refunds owed for overpayment of a cure, redemption, release, or foreclosure deposit.

(2) Any overbid, as defined in section 38-38-100.3, that is equal to or greater than twenty-five dollars and that remains unclaimed for five years from the date of sale is presumed abandoned.

COMMENT: Overbids are handled as described in 38-38-111(3).

38-13-110. Report and payment or delivery of abandoned property

(1) (a) A person holding property, tangible or intangible, presumed abandoned and subject to custody as unclaimed property under this article shall report to the administrator concerning the property as provided in this section.

COMMENT: The report is only required if you have property to report. (2) The report must include: (a) Except with respect to money orders, the name, if known, and last-known address, if any, of each person appearing from the records of the holder to be the owner of property presumed abandoned under this article; (c) The nature and identifying number, if any, or a description of the property and the amount appearing from the records to be due, …; (d) The date the property became payable, demandable, or returnable and the date of the last transaction with the apparent owner with respect to the property; and (e) Other information the administrator prescribes by rule as necessary for the administration of this article.

COMMENT: All of your unclaimed property is in the form of money owed. (4) (a) The report required by subsection (1) of this section shall be filed and, pursuant to section 38-13-112, payment or delivery of abandoned property shall be made before November 1 of each year as of June 30 next preceding, with the initial report to be filed before November 1, 1987, except as provided in paragraphs (b), (c), (d), and (e) of this subsection (4). (c) On written request by any person required to file a report and, pursuant to section 38-13-112, pay or deliver abandoned property, the administrator may postpone the reporting date. …

COMMENT: Your reporting year closes each June 30 with the report due October 31. You may request an extension. (5) Except as provided in subsection (6) of this section, not more than one hundred twenty days before filing the report and, pursuant to section 38-13-112, paying or delivering the abandoned property required by this section, the holder in possession of property presumed abandoned and subject to custody as unclaimed property under this article shall send written notice to the apparent owner's last-known address, informing such owner that the holder is in possession of property subject to this article if: (a) The holder has in its records an address for the apparent owner which the holder's records do not disclose to be inaccurate; (b) The claim of the apparent owner is not barred by the statute of limitations; and (c) The property has a value of fifty dollars or more.

COMMENTS: 1. This primarily applies to making a second contact with the person owed a refund from a cure, redemption, release payment, or foreclosure deposit.

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2. If you are holding money from an overbid, under 38-38-111(2.5), you have sent a mailed notice to the owner at the “best available address.” This would seem to cover the provision in paragraph (5)(a) that your records find the address to be inaccurate.

38-13-112. Payment or delivery of abandoned property to the administrator

(1) (a) Except as otherwise provided in subsection (2) of this section, a person who is required to file a report under section 38-13-110 shall pay or deliver to the administrator all abandoned property required to be reported at the time such report is filed. (b) (I) A holder may voluntarily, prior to payment or delivery of said abandoned property, deduct and retain two percent of the value of the property or twenty-five dollars whichever is more per item.

COMMENT: 38-38-111(3)(c) allows the officer to deduct the cost of mailing and publishing the notices of overbid funds. It would seem to go against 38-37-104(1) for the officer to retain 2% of the overbid or $25.

(2) (a) If the owner establishes the right to receive the abandoned property to the satisfaction of the holder before the property has been delivered or if it appears that for some other reason the presumption of abandonment is erroneous, the holder need not pay or deliver the property to the administrator, and the property will no longer be presumed abandoned. In that case, the holder shall file with the administrator a written explanation of the proof of claim or of the error in the presumption of abandonment.

COMMENT: Since the payment of the money to the administrator is supposed to accompany the report, it is difficult to see how this provision would apply to public trustees.

38-30-171. Survival of remedies and title to corporate property after dissolution

(1) This section shall apply to corporations for profit that were both formed under the laws of this state and dissolved before July 1, 1994. (2) The dissolution of a corporation shall not eliminate or impair any remedy available to or against the corporation or its directors, officers, or shareholders for any right or claim existing or any liability incurred prior to such dissolution if an action or other proceeding is commenced thereon within two years after the date of the dissolution. The foregoing limitation shall not apply to any action affecting title to real estate. Any action or proceeding by or against the corporation may be prosecuted or defended by the corporation in its corporate name. The shareholders, directors, and officers of the corporation shall have power to take such corporate and other action as shall be necessary or appropriate to effect any remedy available to the corporation, pursue any action or proceeding by the corporation, or defend against any action or proceeding against the corporation. (3) (a) After dissolution of the corporation, title to any property of the corporation not previously distributed or disposed of by the corporation shall remain in the corporation. The majority of the surviving members of the last acting board of directors as named in the files of the secretary of state shall have full power and authority: (I) To sue and be sued in the corporate name and, for purposes of suit against such corporation, each director is an agent for process; and (II) To act on behalf of and in the name of such corporation to convey and dispose of any corporate property not distributed or disposed of in the dissolution. (b) Final disposition of such property shall be made by the majority of the surviving directors in the manner provided by law at the time of dissolution of such corporation. Upon the death of the last survivor of such directors, the public trustee of the county in which property owned by such corporation is situated shall have full power and authority to act on behalf of and in the name of such corporation to convey and dispose of such property.

COMMENT: If a for-profit corporation dissolved before July 1, 1994, and if there are no living directors, the public trustee has the authority to convey and dispose of property on behalf of the corporation.

38-30-173. Survival of remedies and title to corporate property after dissolution - nonprofit corporations

(1) This section shall apply to nonprofit corporations that were dissolved before July 1, 1998, and either formed under articles 20 to 29 of title 7, C.R.S., or elected or could have elected to accept such articles as set forth in articles 20 to 29 of title 7, C.R.S.; except that this section shall not apply to any corporation that was dissolved by operation of law before July 1, 1998, as a consequence of the suspension of such corporation and was eligible for reinstatement or restoration, renewal, and revival on June 30, 1998. (2) The dissolution of a corporation shall not eliminate or impair any remedy available to or against the corporation or its directors, officers, or members for any right or claim existing on dissolution or any liability incurred prior to such dissolution if an action or other proceeding is commenced within two years after the date of the dissolution; except that this subsection (2) shall not apply to any action affecting the title to real estate. Any action or proceeding by or against the corporation may be prosecuted or defended by the corporation in its corporate name. The members, directors, and officers of the corporation shall have the power to take such corporate and other action as shall be necessary or appropriate to effect any remedy available to the corporation, or defend any action or proceeding against the corporation. (3) (a) After dissolution of the corporation, title to any property of the corporation not previously distributed or disposed of by the corporation shall remain in the corporation. The majority of the surviving members of the last acting board of directors as named in the files of the secretary of state shall have the power and ability to:

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(I) Sue and be sued in the corporate name, and, for purposes of suit against such corporation, each director is an agent for service of process; and (II) Act on behalf of and in the name of such corporation to convey and dispose of any corporate property not distributed or disposed of in the dissolution. (b) Final disposition of such property shall be made by the majority of the surviving directors in the manner provided by law at the time of the dissolution of the corporation. On the date of the death of the last survivor of the directors, the public trustee of the county in which the property owned by such corporation is situated shall have the power and authority to act on behalf of and in the name of such corporation to convey and dispose of the property.

COMMENT: If a non-profit corporation dissolved before July 1, 1998, and if there are no living directors, the public trustee has the authority to convey and dispose of property on behalf of the corporation.

38-33.3-316. Lien for assessments

COMMENTS: This section is included in the Recommended Guidelines Manual as a reference supporting the requirements for a homeowner association (HOA) to file an intent to redeem under 38-38-302(1). Redemption rights and the amount of the lien deviate from the standard lien in the following ways: A. Section (4) says a notice of statement of lien not need to be recorded separately from the recorded declaration at all. The declaration is the recorded instrument evidencing the lien referenced in subsection 38-38-302(1)(e), but PTAC’s legal counsel advises that you may accept a recorded statement of lien recorded prior to recording of the NED which references the declaration and its recording information. B. The statutory nature of the lien is based in section (1) on the recording of a declaration of covenants with the power to levy assessments. Not all HOAs have that power. To show this, you need to request a copy of the recorded declaration of covenants to show the power to levy assessments if a notice of lien is accepted is the recorded instrument evidencing the lien as described above. C. Under sub-section (2)(d), this applies as long as the declaration of covenants was recorded prior to the deed of trust and as long as one or the other was recorded after 6/30/1992. We have very few foreclosures on deeds of trust from before July 1992. If the declaration was recorded after the deed of trust, the HOA lien will be a junior lien with a priority date based on recording of the declaration for the entire lien amount. D. Under sub-section (2)(b), an amount equal to regular assessments due without acceleration during the 6 months before the NED was recorded is considered senior to the first deed of trust (the so-called “super priority” amount). So you need to get from the HOA a statement of the total amount currently due and a statement of what this “senior” portion would be. Any remainder left when you subtract the “senior” amount from the total due is what is “junior.” This amount must be greater than zero in order for the HOA lien to have a right to redeem, and this amount is the figure to use for the statement in 38-38-302(1)(f). E. If the HOA lien does have a right to redeem, under sub-section (2)(a) the junior portion is considered senior to all other junior liens. Thus the HOA lien is always, without exception, assigned the first redemption period as defined in 38-38-302(4)(d) unless reduced to judgment, in which case priority is based on recording of the transcript of judgment, unless the transcript of judgment order states otherwise.. Sample Policy for Redeeming HOA Liens

(1) The association, if such association is incorporated or organized as a limited liability company, has a statutory lien on a unit for any assessment levied against that unit or fines imposed against its unit owner. Unless the declaration otherwise provides, fees, charges, late charges, attorney fees, fines, and interest charged pursuant to section 38-33.3-302 (1) (j), (1) (k), and (1) (l), section 38-33.3-313 (6), and section 38-33.3-315 (2) are enforceable as assessments under this article. The amount of the lien shall include all those items set forth in this section from the time such items become due. If an assessment is payable in installments, each installment is a lien from the time it becomes due, including the due date set by any valid association's acceleration of installment obligations. (2) (a) A lien under this section is prior to all other liens and encumbrances on a unit except: (I) Liens and encumbrances recorded before the recordation of the declaration and, in a cooperative, liens and encumbrances which the association creates, assumes, or takes subject to; (II) A security interest on the unit which has priority over all other security interests on the unit and which was recorded before the date on which the assessment sought to be enforced became delinquent, or, in a cooperative, a security interest encumbering only the unit owner's interest which has priority over all other security interests on the unit and which was perfected before the date on which the assessment sought to be enforced became delinquent; and (III) Liens for real estate taxes and other governmental assessments or charges against the unit or cooperative.

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113 (b) Subject to paragraph (d) of this subsection (2), a lien under this section is also prior to the security interests described in subparagraph (II) of paragraph (a) of this subsection (2) to the extent of: (I) An amount equal to the common expense assessments based on a periodic budget adopted by the association under section 38-33.3-315 (1) which would have become due, in the absence of any acceleration, during the six months immediately preceding institution by either the association or any party holding a lien senior to any part of the association lien created under this section of an action or a nonjudicial foreclosure either to enforce or to extinguish the lien. (c) This subsection (2) does not affect the priority of mechanics' or materialmen's liens or the priority of liens for other assessments made by the association. A lien under this section is not subject to the provisions of part 2 of article 41 of this title or to the provisions of section 15-11-201, C.R.S. (d) The association shall have the statutory lien described in subsection (1) of this section for any assessment levied or fine imposed after June 30, 1992. Such lien shall have the priority described in this subsection (2) if the other lien or encumbrance is created after June 30, 1992. (3) Unless the declaration otherwise provides, if two or more associations have liens for assessments created at any time on the same property, those liens have equal priority. (4) Recording of the declaration constitutes record notice and perfection of the lien. No further recordation of any claim of lien for assessments is required. (5) A lien for unpaid assessments is extinguished unless proceedings to enforce the lien are instituted within six years after the full amount of assessments become due. (6) This section does not prohibit actions or suits to recover sums for which subsection (1) of this section creates a lien or to prohibit an association from taking a deed in lieu of foreclosure. (7) The association shall be entitled to costs and reasonable attorney fees incurred by the association in a judgment or decree in any action or suit brought by the association under this section. (8) The association shall furnish to a unit owner or such unit owner's designee or to a holder of a security interest or its designee upon written request, delivered personally or by certified mail, first-class postage prepaid, return receipt, to the association's registered agent, a written statement setting forth the amount of unpaid assessments currently levied against such owner's unit. The statement shall be furnished within fourteen calendar days after receipt of the request and is binding on the association, the executive board, and every unit owner. If no statement is furnished to the unit owner or holder of a security interest or his or her designee, delivered personally or by certified mail, first-class postage prepaid, return receipt requested, to the inquiring party, then the association shall have no right to assert a lien upon the unit for unpaid assessments which were due as of the date of the request.

38-34-104. Death of trustee [of an express trust]

Upon the death of a sole trustee or the surviving trustee of an express trust created by any written instrument affecting title to real property, the trust shall not descend to the heirs of such trustee nor pass to his personal representative, but the trust if then unexecuted shall vest in the then public trustee and his successors in office of the county wherein the real estate is situate, with all powers of the original trustee. The district court may, upon application of any party in interest, appoint a new trustee except in such cases where by law or by the instrument a successor in trust is provided, and in such cases the trust shall vest in such successor.

COMMENT: If there is an express written trust affecting title to real property and the sole trustee – or surviving trustee dies – the public trustee has the authority to convey and dispose of property within the county on behalf of the trust. More likely you will want to petition the court to appoint a new trustee as provided in this section.

38-35-106. Deeds - acknowledgment, absent or defective - notice - deemed proper, when.

(1) Any written instrument required or permitted to be acknowledged affecting title to real property, whether acknowledged, unacknowledged, or defectively acknowledged, after being recorded in the office of the county clerk and recorder of the county where the real property is situate, shall be notice to all persons or classes of persons claiming any interest in said property.(2) Any unacknowledged or defectively acknowledged instrument which has remained of record for a period of ten years in such office shall be deemed to have been properly acknowledged. This section shall apply to all recorded instruments.(3) A document required or permitted to be acknowledged affecting title to real property that is signed in a person's official capacity by a public trustee, county treasurer, county sheriff, or a deputy of such an official acting for that official that contains the seal of such an official shall be deemed to have been properly acknowledged.

38-35-109. Instrument may be recorded - validity of unrecorded instruments - liability for fraudulent documents

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COMMENTS: This section is included in the Recommended Guidelines Manual as a reference describing the affidavit of scrivener’s error referenced in 38-38-101(1)(f), 38-38-101(4)(k), and 38-38-705(2). 1. The affidavit is used only to correct recorded documents that affect the title to real property, such as deeds of trust, warranty deeds, confirmation deeds, COPs, and CORs. 2. The term “scrivener’s error” is undefined in the law. It is an error made by the drafter of the document, which may range from a typographical error to the insertion of the wrong party or legal description entirely. 3. An affidavit of scrivener’s error prepared and signed by the public trustee is the only correct way to correct a recorded document prepared by the office. There is no provision for voiding such a document, there is no such thing as a “corrective confirmation deed,” and re-recording a document to correct it can lead to confusion in the chain of title. 4. Only prepare and record an affidavit of scrivener’s error if the error was, in fact, one introduced by the office – perhaps the wrong name or address was entered for the COP holder or information was erroneously transcribed from the NED in to the public trustee’s software system. Do not use a scrivener’s affidavit to correct errors made by others, such as the holder incorrectly listing their own address on their bid or a third-party bidder using the incorrect company name for bidding at sale. Most particularly, do not use a scrivener’s affidavit to the COP or confirmation deed to correct an error introduced by the holder’s attorney on the NED. 5. There is no statutory provision for correcting an error on the NED once it is recorded. If such an error is found, either the foreclosure must be withdrawn and refiled (including setting the sale aside in court if necessary) or the foreclosure must proceed despite a very minor error. Do not record or accept a recorded scrivener’s affidavit for this purpose. 6. There is also no statutory provision for using an affidavit of scrivener’s error to correct a release of deed of trust. The most common reason someone might wish do so would be having included too much property in a partial release. A scrivener’s affidavit may not be used to re-encumber land or reinstate a lien; the holder of the lien would need to seek a court order to do that. Affidavit of Scrivener’s Error

(1) All deeds, powers of attorney, agreements, or other instruments in writing conveying, encumbering, or affecting the title to real property, certificates, and certified copies of orders, judgments, and decrees of courts of record may be recorded in the office of the county clerk and recorder of the county where such real property is situated; except that all instruments conveying the title of real property to the state or a political subdivision shall be recorded pursuant to section 38-35-109.5. No such unrecorded instrument or document shall be valid against any person with any kind of rights in or to such real property who first records and those holding rights under such person, except between the parties thereto and against those having notice thereof prior to acquisition of such rights. This is a race-notice recording statute. In all cases where by law an instrument may be filed in the office of a county clerk and recorder, the filing thereof in such office shall be equivalent to the recording thereof, and the recording thereof in the office of such county clerk and recorder shall be equivalent to the filing thereof. (1.5) (a) Any person may record in the office of the county clerk and recorder of any county a master form mortgage or master form deed of trust. Such forms shall be entitled to recordation without any acknowledgment or signature; without identification of any specific real property; and without naming any specific mortgagor, mortgagee, trustor, beneficiary, or trustee. Every instrument shall contain on the face of the document "Master form recorded by (name of person causing instrument to be recorded)." The county clerk and recorder shall index such master forms in the grantee index under the name of the person causing it to be recorded. (b) (I) Any of the provisions of such master form instrument may be incorporated by reference in any mortgage or deed of trust encumbering real estate situated within the state, if such reference in the mortgage or deed of trust states the following: (A) That the master form instrument was recorded in the county in which the mortgage or deed of trust is offered for record; (B) The date when recorded and the book and page or pages or reception or index number where such master form was recorded; (C) That a copy of the provisions of the master form instrument was furnished to the person executing the mortgage or deed of trust; and (D) If fewer than all of the provisions of the referenced master form are being adopted or incorporated, a statement identifying by paragraph, section, or other specification method which will clearly identify the incorporated provision or provisions, provided that in the absence of specific designation, the entire referenced master form will be deemed to be incorporated. (II) The recording of any mortgage or deed of trust which has incorporated by reference any of the provisions of a master form recorded as provided in this section shall have the same effect as if such provisions of such master form had been set forth fully in the mortgage or deed of trust. (2) All deeds dated after January 1, 1977, and recorded with the county clerk and recorder pursuant to subsection (1) of this section shall include a notation of the legal address of the grantee of the instrument, including road or street address if applicable. Any such deed submitted to the county clerk and recorder lacking such address shall not be recorded and shall be returned to the person requesting the recordation. Acceptance of a deed by the county clerk and recorder in violation of this subsection (2) shall not make such deed invalid. A notation as required in this subsection (2) may be made by a person other than the grantee after the execution of the deed. (5) (a) An affidavit, executed under penalty of perjury, stating facts enumerated under paragraph (b) of this subsection (5) and made by a person who has actual knowledge of, and is competent to testify in a court of competent jurisdiction about, the facts in such affidavit may

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affect the title to real property within the state and may be recorded in the office of the county clerk and recorder in the county in which the real property is situated. (b) When recorded, an affidavit as described in paragraph (a) of this subsection (5), or a certified copy of such affidavit, shall constitute prima facie evidence of one or more of the following facts: (IV) A scrivener's error. (c) An affidavit filed under this subsection (5) shall state that the affiant has actual knowledge of, and is competent to testify to, the facts in the affidavit and shall include a description of the land, the title that may be affected by facts stated in such affidavit, a reference to an instrument of record containing such description, the name of the person appearing by the record to be the owner of such land at the time of the recording of the affidavit, and an acknowledgment that the affiant is testifying under penalty of perjury. The recorder shall index the affidavit in the name of the record owner.

38-35-126. Contract for deed - escrow of tax moneys - written notice

(1) (a) Parties entering into a contract for deed to real property shall designate the public trustee of the county where the real property is located to act as escrow agent for moneys paid or to be paid by the purchaser to meet the property tax obligations on the real property, including the seller's credit at closing for the current year's property taxes and periodic property tax payments, which the contract shall provide will be made monthly by the purchaser to the public trustee. The purchaser shall be responsible for payment to the public trustee of the escrow fee pursuant to section 38-37-104 (1) (d).

COMMENTS: 1. It is very important that any public trustee reads the entire commentary for this entire section. 2. After reading this section, the public trustee may decide that designating a local escrow company to take this responsibility under subsection (1)(d) is a good choice. Local escrow companies have systems in place to serve many purchasers. Most public trustees do not have enough call for this service to have such systems in place. You may want to jump down to 38-35-126(1)(d) for more information. 3. The public trustee must be named in the contract for deed to fulfill this role. If not named, the public trustee has no statutory responsibility or authority to provide this service. 4. This section, in effect, addresses private parties, a seller and a purchaser. Often the buyer cannot or does not want to use the services of a lender to finance the transaction. 5. Because in a contract for deed the deed is not given until fulfillment of the contract, the purchaser needs protection for escrowing tax payments. There have been times when purchasers give payments for taxes to the seller but the seller does not use that money to pay the taxes. This section allows the designation of the public trustee as escrow agent for the tax payments. 6. The public trustee is responsible for the portion charged to the seller at the time of closing for the year of the sale and the monthly escrow payments made by the purchaser. 7. The public trustee collects a $75 fee paid in advance by the purchaser for each taxable year or portion thereof for the life of the contract.

Once each year during the month of April, upon notice from the county treasurer, the public trustee shall, to the extent funds are on deposit in the escrow account, transfer sufficient funds from the escrow account to the county treasurer for payment of property taxes on the real property for the prior taxable year.

COMMENTS: 1. The public trustee makes payment from the escrow account to the treasurer for real property taxes in April. 2. If there are not sufficient funds to make the entire tax payment, the public trustee should notify the purchaser for extra funds and adjust the monthly escrow tax payment. 3. Colorado real property taxes are collected in arrears so the tax payment made by the public trustee is for the prior taxable year.

The public trustee shall continue as escrow agent for tax moneys collected on the real property until the deed to the real property is delivered to the purchaser and recorded. At the time of delivery, the public trustee shall release to the purchaser any moneys remaining in the escrow account and the receipts for all property taxes paid on the property by the public trustee. If the public trustee determines that the escrow is no longer necessary, the public trustee may terminate the escrow account. The public trustee shall notify the county treasurer of the termination and shall transfer any moneys held in escrow to the county treasurer for payment of property taxes in accordance with section 39-10-104.5, C.R.S. Any amount so transferred by the public trustee shall be subtracted from the amount of property tax payable on the real property at the time annual property taxes for the current or subsequent taxable years are due. Upon termination of the escrow account, any amount not accepted by the county treasurer upon transfer shall be returned by the public trustee to the person holding title to the real property that is the subject of the contract for deed to real property.

COMMENTS: 1. The public trustee continues to serve in this capacity until the deed is delivered to the purchaser and recorded. At that time, any money in the escrow is paid to the purchaser.

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2.The public trustee may terminate the escrow (presumably this means before recording and delivery of the deed) if the public trustee determines the escrow is no longer necessary. In that case, you notify the treasurer of termination and transfer all escrow funds to the treasurer for application to present and future taxes. 3. No other reason for termination is addressed. 3. Because the treasurer must send tax notices to the owner of record regardless of any escrow arrangement, the notification given to the treasurer signals to cease sending any duplicate tax notices. 4. The public trustee shall submit the payment by April 30th.

(b) For the purposes of this section, a "contract for deed to real property" means a contract for the sale of real property which provides that the purchaser shall assume possession of the real property and the rights and responsibilities of ownership of the real property but that the deed to such real property will not be delivered to the purchaser for at least one hundred eighty days following the latest execution date on the contract for deed to real property and not until the purchaser has met certain conditions such as payment of the full contract price or a specified portion thereof. "Contract for deed to real property" includes installment land contracts.

COMMENTS: A contract for deed covered by this section allows the purchaser to assume possession along with the rights and responsibilities of ownership of the property on execution of the contract, but provides that the purchaser does not receive the deed until the later of at least 180 days after the final execution date of the contract and having met specified conditions of the contract such as payment of all or a stated portion of the purchase price.

(c) The public trustee shall deposit tax moneys received pursuant to the provisions of paragraph (a) of this subsection (1) in an escrow account opened for such purpose in one or more financial institutions which are in compliance with and qualified and defined in article 10.5 of title 11, C.R.S. Moneys from more than one transaction may be commingled in one account, to be accounted for separately. If the escrow account opened by the public trustee under the provisions of this subsection (1) bears interest, such interest shall be retained by the public trustee to defray expenses arising from the administration of such escrow account.

COMMENTS: 1. The public trustee shall deposit the tax moneys with a qualified financial institution which is in compliance with article 10.5 of title 11, C.R.S. A separate bank account is not needed for each escrow account. 2. The public trustee must properly account for all escrow monies. 3. If the bank account bears interest, the public trustee keeps the interest to help defray expenses of the administration of the escrow.

(d) A public trustee may designate an alternate to act as escrow agent on any contract for deed to real property in which the public trustee is designated as escrow agent pursuant to the provisions of this section; except that such alternate shall not be a party to the contract for deed to real property. Such designation shall be made by sending written notification of such designation to the parties to such contract and to the county treasurer. Such notice shall include the name and legal address of the designated alternate and the date such designated alternate shall assume the duties of escrow agent. Such designated alternate shall have all of the duties and powers of the public trustee to act as escrow agent on a contract for deed to real property as stated in this section. In the event that the public trustee designates an alternate to serve as escrow agent, the purchaser shall pay to the designated alternate the escrow fee as stated in paragraph (a) of this subsection (1).

COMMENTS: 1. To serve purchasers better, the public trustee can designate an alternate to serve as escrow agent as long as the alternate is not a party to the contract. The public trustee shall send written notification of the designation to the contract parties and the county treasurer. 2. The purchaser shall then pay the yearly escrow fee to the alternate. Example of Designation of Alternate Escrow Agent

(2) Within ninety days of executing and delivering a contract for deed to real property, the seller shall file with the county treasurer of the county wherein the real property is located a written notice of transfer by contract for deed to real property. Such notice shall not operate to convey title. Such notice shall include the name and legal address of the seller, the name and legal address of the purchaser, a legal description of the real property, the date upon which the contract for deed to real property was executed and delivered, and the date or conditions upon which the deed to the real property will be delivered to the purchaser, absent default. In addition, within ninety days of executing and delivering the contract for deed to real property, the seller shall file a real estate transfer declaration with the county assessor of the county wherein the property is located, pursuant to the provisions of section 39-14-102, C.R.S.

COMMENTS: 1. It is the responsibility of the seller to file with the county treasurer and the county assessor the notice of the contract for deed within 90 days of execution of the deed. It is presumed that this gives the county assessor authority to add the purchaser’s name to the account. Tax related notices would then go directly to the purchaser. 2. Failure of the seller to file notice is addressed in subsection (3).

(3) The buyer shall have the option of voiding any contract for deed to real property which fails to designate the public trustee as escrow agent for deposit of property tax moneys or for which no written notice is filed with the county treasurer's office or the county assessor's office. Upon voidance of such contract, the buyer shall be entitled to the return of all payments made on the contract, with statutory

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interest as defined in section 5-12-102, C.R.S., and reasonable attorney fees and costs. This avoidance right shall expire on the date seven years after the latest execution date on the contract for deed to real property unless exercised prior to such date.

COMMENTS: 1. The buyer has the option to void the contract if the contract did not designate the public trustee for escrow service or the seller did not follow through with notification. 2. The buyer always has the option to walk into the treasurer’s office and simply pay the taxes. However, the failure to follow these steps may prevent the buyer from receiving tax documents including the notice of value from the county assessor. Because the buyer takes possession of the property with all rights, the buyer would qualify to protest values. If the buyer protests values successfully, the real estate taxes would go down. 3. The buyer is not required to exercise this choice. It is an option. 4. If the buyer exercises this option, s/he is entitled to the return of all payments on the contract, statutory interest, and reasonable costs associated with the process. 5. The buyer can exercise this option at any time until seven years after the latest execution (signature) date on the contract.

(4) The provisions of subsections (1) and (3) of this section shall not apply to the parties to a contract for deed to real property so long as the seller complies with the requirements of subsection (2) of this section, so long as the real property which is the subject of such contract for deed to real property is not subdivided into parcels which are smaller than one acre, and so long as the seller pays the annual property tax obligations on the real property which is the subject of such contract for deed to real property or submits a bond or an irrevocable letter of credit in the amount of the taxes due on such real property to the county treasurer, either of which shall be immediately payable to such county treasurer upon default. Payment of such property taxes or submittal of such bond or irrevocable letter of credit shall be made within thirty days of mailing of the notice of taxes due from the county treasurer and prior to seeking reimbursement from the purchaser.

COMMENTS: 1. Provisions of subsection (1) and (3) shall not apply as long as: A. the seller fulfills subsection (2) by noticing the county treasurer and the county assessor. B. the real property is not subdivided into parcels less than one acre; and C. the seller pays the annual property tax or submits a bond or an irrevocable letter of credit to the county treasurer for payment. 2. The public trustee gets to sort through all of this, track monthly payments, and pay the account timely at the treasurer’s office all for a little bit of interest and a whopping $75 annual fee. - OR – The public trustee can designate an alternate escrow agent. 3. Many public trustees find the time spent administering this process to be unacceptable and guide buyers and sellers to seek out escrow companies.

39-10-104.5. Payment dates - optional payment dates - failure to pay – delinquency

(1) The provisions of this section, as amended, are effective January 1, 1994. (2) Except as provided in subsections (6) and (7)of this section, at the option of the taxpayer, property taxes may be paid in full or in two equal installments, the first such installment to be paid on or before the last day of February and the second installment to be paid no later than the fifteenth day of June.

COMMENTS: 1. Unless property taxes are less than $25.00 or sale prorated prepaid taxes for manufactured homes, the accounts are eligible to be paid in two installments with due dates of the last day of February and June 15th. 2. The statute references (11) but that has been repealed.

(3) (a) If the first installment is not paid on or before the last day of February, then delinquent interest on the first installment shall accrue at the rate of one percent per month from the first day of March until the date of payment; except that, if payment of the first installment is made after the last day of February but not later than thirty days after the mailing by the treasurer of the tax statement, or true and actual notification of an electronic statement, pursuant to section 39-10-103 (1) (a), no such delinquent interest shall accrue. If the second installment is not paid by the fifteenth day of June, delinquent interest on the second installment shall accrue at the rate of one percent per month from the sixteenth day of June until the date of payment. Interest on the first installment shall continue to accrue at the same time that interest is accruing on the unpaid portion of the second installment. The taxpayer shall continue to have the option of paying delinquent property taxes in two equal installments until one day prior to the sale of the tax lien on such property pursuant to article 11 of this title. (b) Notwithstanding the provisions of paragraph (a) of this subsection (3), if the full amount of taxes is paid in a single payment on or before the last day of April, then no delinquent interest shall accrue on any portion of the taxes. If the full amount of taxes is paid in a single payment after the last day of April, interest shall be added to the full amount of taxes due in the amount of one percent per month which shall accrue from the first day of May until the date of payment.

COMMENTS:

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1. This is not as confusing as it seems. 2. Taxpayers have the choice of making two half payments or one whole payment. According to 38-35-126(1)(a), the public trustee will only make whole payments in the month of April. 3. It also says that the public trustee shall do this upon notice from the treasurer. It is prudent for the public trustee to monitor the escrow account and not wait for any notice from the treasurer. 4. The due dates, as far as the treasurer is concerned, are adjusted when the due dates fall on weekends and holidays. Postmarks are also taken into consideration for deeming a payment on time. It is prudent to make the payment promptly in April so there is no concern over whether a payment is on time. See the comment on the next section for further information.

(c) Interest shall be calculated on delinquent taxes as provided in paragraphs (a) and (b) of this subsection (3) as specified in the following table:

COMMENT: Since there is no remedy given for the public trustee making a payment late, it seems likely that interest for late payments would be paid out of public trustee operating expenses.

(5) In computing the amount of delinquent interest due under this section, portions of months shall be counted as whole months. COMMENT: Interest is one percent simple interest with the charge being the same for the whole month. In June, with payment due on June 15th, the full interest is charged from June 16th through June 30th .

(6) There shall be no installment payment of property taxes totaling less than twenty-five dollars, and such taxes shall be paid in full no later than the last day of April. If such taxes are not paid prior to the last day of April, delinquent interest on the amount thereof shall accrue at the rate of one percent per month from the first day of May until the date of payment.

COMMENTS: 1. There are some accounts that have taxes totaling less than $25.00. These accounts do not qualify for two half payments. These are often natural resources, state assessed, or aged manufactured homes. 2. Because these accounts are due April 30th, interest starts accruing May 1st. This may seem elementary, but here is an example of how taxpayers may save money. If a taxpayer wants to pay a late first-half payment of $500 in April, the interest will be $10. If they can swing the whole payment of $1,000 in April, they will pay no interest. Conversely, if the taxpayer makes a whole payment on May 1st of $1,000, the interest is $10. If they pay only the half payment of $500 on May 1st, the interest will be $15.

(7) The treasurer shall be authorized to accept funds paid by the seller and accepted by the dealer as a partial payment of taxes which have not yet been levied and which are not yet due but which have been prorated between the buyer and the seller at the time of the sale of a mobile home. A dealer shall remit taxes collected under this subsection (7) to the treasurer within ten days.

COMMENT: When a dealer sells a manufactured home, he shall remit taxes to the treasurer within 10 days. However, taxes are not levied until January 1st. Therefore the taxes are prorated and posted as a prepayment.

(8) Any payment under this section shall be deemed received by the treasurer on the date that the installment or full payment, including any penalties or fees due, is actually received in the treasurer's office, and actual receipt will be presumed as of the date of the United States postal service postmark. Where a payment is received through the mail or a common carrier but has no United States postal service postmark and the payment is actually received in the treasurer's office no later than five days after the due date, the treasurer shall record the date of payment as the due date of the payment. Where the payment is received through the mail or a common carrier but has no United States postal service postmark and the payment is actually received in the treasurer's office six or more days after the due date, the treasurer shall record the date of payment as the date the payment was received. If the date for filing any tax return or remittance falls upon a Saturday, Sunday, or legal holiday, it shall be deemed to have been timely filed if filed on the next business day.

COMMENT: This section addresses the deeming of a payment being on time or late. A prudent public trustee taking on the responsibility of escrow payments would avoid possible late payments.

(9) An additional charge may be added to any delinquent taxes totaling less than fifty dollars including all delinquent interest and other charges. Such charge shall be for the purpose of covering the administrative costs and fees incurred by the county in collecting such delinquencies and shall be determined by the board of county commissioners or such other body as authorized by the city and county of Denver or as authorized by the city council of the city and county of Broomfield. Such charge shall not exceed twenty-five dollars in any case and shall be limited to such amount less than twenty-five dollars as may be necessary to limit the total charges against such property, including taxes, delinquent interest, and the charge authorized by this subsection (9), to no more than fifty dollars. Charges imposed under the authorization of this subsection (9) shall be a lien under section 39-1-107.

COMMENTS: 1. Administrative charges may be added to cover costs of collecting delinquent account of less than $50. 2. Charges must be approved by the governing bodies.

(10) The treasurer may refrain from collecting any penalty, delinquent interest, or costs where the amount to be collected is fifty dollars or less. Nothing in this subsection (10) shall be construed as releasing any person from the payment of any tax, assessment, penalty, delinquent interest, or costs or any other moneys which are due and owing and which the treasurer is authorized by law to collect.

COMMENT: The treasurer has authority to not collect penalty, delinquent interest, or costs of less than $50. This has been interpreted to mean that the total interest is less than $50. The treasurer is not able to subtract $50 from interest of, for example, $100.

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PROCEDURES

RECEIPT OF INTENT TO CURE

(38-38-104) 1. Receive the intent to cure, generally on a form provided for that purpose. The intent must be received in writing, but may be delivered in person, through the mail, via fax, or email. The cure intent does not need to be signed. There is no charge to file an intent to cure. An example of an intent to cure form is: Notice of Intent to Cure

2. Verify that the filer has the right to file the intent.a. Most often the filer is one of the borrowers, as shown on the evidence of debt, or the owner of the property as of the recording of the NED. b. If the filer claims to be an owner rather than a borrower, verify that information with the Assessor; if the Assessor’s records do not reflect that the filer was the owner when the NED was recorded, require filer to provide you with documents satisfactory to you from a title company showing the filer was the owner, such as an owners and encumbrance report effective as of the recording of the NED; if the filer was not the owner of record when the NED was recorded then verify that ownership was obtained in one of the ways described in the law (estate, spouse, court order, etc.) c. Junior lienor, if lien recorded prior to the recording of the NED, may also file an intent to cure. Evidence of the lien should be provided. d. If in doubt, accept the intent to cure – the holder can challenge the right of the filer.

3. Verify that the deadline to file the intent to cure has not passed. a. The intent deadline is fifteen calendar days prior to the actual date of sale (if the 15th day prior to the actual date of sale is a holiday, the deadline rolls ahead to the next business day). b. If the deadline has passed, you should process the intent, but there will be no assurance of receiving a cure statement. If the attorney continues the sale to at least 15 calendar days after the date the intent was filed, then a late-filed intent becomes timely.

4. If the intent is filed in person, go over the form with the person filing to be sure the form is legible, includes phone numbers and email addresses if possible, and includes the best mailing address for the cure statement. Date-stamp the intent and give a copy to the person, AND a. If the filing is late, tell the person filing the intent that we will ask for a cure statement listing the amount they need to pay to get out of default, but because they are filing the intent late, the lender has no obligation to provide the statement unless the sale gets delayed long enough for the filing to be considered timely. b. If the filing is timely, tell the person filing the intent that a cure statement listing the amount they need to pay to get out of default is due to the Public Trustee within 10 business days (or by the 8th day prior to sale, whichever is first), and that if the statement does not arrive, then the sale will be delayed.

5. Make a record in your files that the intent to cure was filed, including the date and contact information. Track the deadline for receipt of the statement.

6. Request a cure statement from the holder or the attorney for the holder. a. If the intent as filed late, acknowledge that in the body of the email by writing something like “Late intent – statement not required unless sale is continued.” b. Retain a copy of the request.

7. Retain the notice of intent to cure.

CURE STATEMENT

(38-38-104)

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1. The cure statement must be returned by the holder by the earlier of noon on the 10th business days after the request, or by noon on the 8th calendar day (Tuesday, almost always) before sale. There is no deadline for a late intent to cure, unless the sale is continued such that the intent becomes timely.

2. If a valid cure statement is not received on time, continue the sale for a week, repeating that penalty on a weekly basis until the statement is received. Notify the attorney at least the first time that you do this. The only exception would be if the file is in bankruptcy.

3. When you receive a cure statement following a timely intent, verify that it meets the statutory requirements in its duration a. The cure statement must be valid for no more than 30 calendar days from its receipt. b. The cure statement must be valid for at least 10 calendar days from its receipt, or until the day before the actual sale date (the last possible cure date), whichever is earlier. c. Cure statements must be valid for complete days. d. Cure statements should not expire on a non-business day. A statement that expires on a non-business day may be accepted it is still compliant in duration after you roll back the deadline to the previous business day, and you need to make this clear when the statement is transmitted. e. If a cure statement is sent by the holder without a request, or as the result of a late intent that has not become timely, then there are no requirements for its duration.

4. Verify that the cure statement meets the statutory requirements in its form, as specified in the law a. The cure statement must be signed by an attorney or signed and acknowledged by the holder b. The cure statement must list the number and amount of missed payments c. The cure statement must include the level of detail described in the law d. The cure statement must be a fixed amount e. There must be room for the public trustee to add fees.

5. If the cure statement is invalid, reject it and request a revision from the attorney for the holder.

6. If the cure statement is valid, mark it as received in your tracking system.

7. Add the public trustee fees and costs to the cure statement, and update the total on the statement. Include any fees that have already been incurred, or will be incurred by the time the statement expires (such as publications).

8. Create a cover letter from the public trustee to the person who filed the intent to cure.

9. Mail a copy of the cover letter and cure statement to person filing the intent to cure. If possible, also fax or email the information.

10. Retain a copy of the cure statement and cover letter.

CURE PAYMENTS

(38-38-104) 1. Cure payments, by statute, must be made by noon on the business day prior to the actual sale date. That said, if the cure payment is brought in on the afternoon on the day before sale, and if the cure figures are good through that day, in the opinion of PTAC that is “good cause” to continue the sale for one week to make the payment valid.

2. Verify that the funds provided by the party paying the cure are:

a. Received by the valid through date on the most recent cure statement.

b. Equal to or greater than the amount on the cure statement.

c. Payable to the public trustee.

d. Certified check, cashier’s check, teller check, official check; wire transfer; or cash. A check must be drawn on a state chartered bank, savings and loan or credit union licensed to do business in Colorado or a federally chartered bank, savings bank or credit union.

3. Mark the cure as received in your tracking system.

4. Create a receipt and give it to the person paying.

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5. Tell the person curing that the foreclosure will be withdrawn and that a. It will take about 2 weeks before the bank receives and processes the payment into the account b. The most recently due payment probably was not included in the cure statement – check with the bank

6. If the payment is made during the week prior to scheduled sale, pull any bid that has been placed for sale.

7. Make a copy of the payment check for the file.

8. Deposit the cure payment.

9. Cancel any remaining publications

10. Notify the attorney that the cure payment has been received, and request the withdrawal paperwork along with any outstanding payment due.

11. Prepare to distribute the cure payment. a. A check will be written to the holder in the amount that was on the cure statement plus the actual public trustee fees charged (this may be less than what was on the cure statement sent to the borrower, if publications were cancelled. b. A check will be written to the person curing in the amount of any public trustee fees that were dropped from the original cure statement

12. Hold the file pending receipt of the withdrawal form. The withdrawal from should be accompanied by any balance due from the attorney for the holder to the public trustee.

13. Record the withdrawal.

14. Also hold the file pending clearance of funds – do not write the checks until at least the 4th business day after they were deposit, and after verifying final credit to your account with your bank.

15. Send, via certified mail, the proceeds check, a check for any balance check due to the attorney from the original deposit, and original evidence of debt and deed of trust if provided in the filing, to the attorney for the holder.

16. Send any refund check owed to the person who cured the file.

IMPLEMENTATION OF HOUSE BILL 16-1339

DUFFORDWALDECK MILBURN & KROHN LLP Attorneys at Law Richard H. Krohn Direct DialPhone: (970) 248-5850 Email Address: [email protected] IMPLEMENTATION OF HOUSE BILL 16-1339 SUMMARY: Accept as evidence that property is agricultural a written statement from the assessor (1) dated no more than 6 months before NED recording stating that all of the property was assessed and valued as ag property at any time after the date of recording of the DOT, or (2) dated any date stating that none of the property was assessed and valued as other than ag property on the date of recording of DOT or NED. A statement under (2) that some of the property was valued as other than ag does not make the property non-ag if (a) you receive the statement in (1), or (b) the statement the property is non-ag under (2) is based only on the two acre residential classification described in 38-38-108(4).

1. Under 38-38-108(2)(a)(l.5) you must accept as evidence the property is agricultural the written statement from the assessor described in that provision, which is a statement dated no more than 6 months before the NED is recorded that ALL of the property was assessed and valued as agricultural either (a) after the date of recording of the DOT [presumably this means at any time after recording of the DOT], or (b) as of the date of the statement. Alternative (b) is unnecessary and redundant because "as of the date of the statement" will always be at a time after recording of the DOT.

2. Even though 38-38-108(2)(a)(l)(C) has been deleted, you still accept the statement of the assessor that none of the property being foreclosed was assessed and valued as other than agricultural on the date of recording of either (a) the DOT, or (b) the NED. This is so because this Act did not change the definition of agricultural property in 38-38-100.3(1)(c).

That none of the property was assessed and valued as other than agricultural is the same as all of the property being assessed and valued as agricultural, so at first glance this provision appears in light of Section 1 above.

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However, (i) there is no requirement under 38-38-100.3(1 )(c) that the assessor statement be dated no more than 6 months before recording of the NED, and (ii) the date for the determination by the assessor is limited to recording of the NED or recording of the DOT [not after the DOT as under Section 1 above]. Therefore, this states a situation different from that stated in Section 1 requiring you to accept an assessor statement dated more than 6 months before the date of recording of the NED under limited circumstances . There is a further exception to this - see item 3 below. 3. You cannot use designation of property as other than ag under 38-38- 100.3(1)(c) to determine the property is non-ag if the only reason it is non-ag under 100.3(1)(c) is the two acre residential classification described in 38-38-108(4).

RECEIPT OF LIENOR INTENT TO REDEEM

(38-38-302) 1. Verify that the intent to redeem is complete. Use of a standard form helps. In particular you will need: a. Sale number; b. Junior lienor’s name and contact information; c. Recording information about the lien; d. Original or certified copy of the lien and any assignments if lienor not a qualified holder; ordinary copy if lienor is a qualified holder; e. Signed and acknowledged by the holder or signed by the holder’s attorney; f. Statement of lien amount, through the 19th business day after sale.

2. Verify that the lienor has redemption rights (see step 3 for HOA redemptions). a. The lien must have been recorded prior to the recording date of the NED on the file. b. The property encumbered by the lien must overlap with the property in the foreclosure sale, or it must be a judgment against the owner of the property in foreclosure. c. The value of the lien is greater than zero, unless it is a lessee or easement interest holder. d. The intent is filed no later than the end of the 8th business day after sale (see step 4 for late intents) e. If the lienor is not the original holder of the lien, the lien must be accompanied by a trail of assignments from the original holder to the current holder. These assignments do not need to be recorded if originals.

3. For an intent to redeem filed by a homeowners association (HOA) or its assignee: a. The lien statement does not need to be separately recorded, and if it is separately recorded, the recording date of the lien does not matter. b. You need the original or a certified copy of the recorded declaration of covenants to verify that i. The HOA has the right to levy assessments. ii. The declaration was recorded prior to the DOT. iii. Either the declaration or the DOT must have been recorded after 6/30/1992. c. You need the lien broken down with the specificity of a bid statement plus as follows and signed by an officer of the HOA or its attorney: i. Total amount due through the 19th business day after sale. ii. The amount of assessments due without acceleration in the 6 months prior to the recording of the NED. This amount is senior to the DOT in foreclosure and does not have the right to redeem. iii. The remaining amount of the lien after subtracting the senior portion from the total. This amount is junior to the first DOT only, and if greater than zero has the right to redeem during the first redemption period if the first DOT is being foreclosed. Otherwise, the HOA lien is senior to the DOT being foreclosed and has no right to redeem. This amount is the amount of the junior lien. We do not know if the first DoT is being foreclosed, so it will be up to the COP holder to challenge the right to redeem (it is unusual for anyone to redeem a property when there are outstanding senior DoTs).

4. A late intent to redeem may be accepted if: a. It is accompanied by a written authorization from the COP holder or holder’s attorney, or from the most recent COR holder or attorney if redemptions have occurred, b. Redemption periods have already been established, c. The specific redemption period that would be occupied by this lienor has not expired, AND d. No lienor junior to this lienor has redeemed.

5. Make copies of any original documents, including assignments.

6. Collect the $50 fee. This does not need to be certified funds.

7. Record in your files the intent to redeem and the lienor information.

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8. Request a redemption statement from the COP holder. Specify:a. The due date, 13 business days after the sale (2nd business day prior to the start of redemption). b. The valid through date, which is 19 business days after sale (the end of the 1st redemption period). c. The number of calendar days from the date of sale to the valid through date. d. The interest rate to be used. e. The number of lienors who have filed intents so far.

LIENOR REDEMPTION STATEMENT

(38-38-302) 1. The COP holder must provide a redemption statement no later than the end of the 13th business day after sale. The redemption statement may be amended to add expenses up until that same deadline – 2 days prior to the start of any redemption period. If filed later, affects only redemption period(s) beginning more than 2 business days after it is filed. The redemption statement may be amended to reduce expenses at any time. If the redemption statement is not provided on time, calculate one that includes only the purchase price at sale and per diem interest.

2. Verify that the purchase price at sale and the per diem interest shown are correct.

3. Verify that there is a sufficiently explanatory receipt, invoice, or other documentation for each claimed cost, unless the COP holder is a qualified holder. Use this supporting documentation to verify that the cost was incurred by the COP holder after the sale, and is a permitted cost under 38-38-107.

4. If supporting documentation is not included, or if the cost appears to have been incurred before the sale, ask the COP holder to provide the documentation before you accept the statement, ask the holder to submit a new statement that excludes the undocumented cost, or line through the item and recalculate the total due.

5. You may accept a redemption statement without question as 38-38-702(1)(a) makes it clear you are not liable or responsible for determining the amount required to redeem. If the cost listed is clearly not allowable under 38-38-107, you may also ask for a new statement or line the item out. If you are unsure of the cost’s allowability, or believe the amount claimed is excessive, you may educate the COP holder about 38-38-302(8) which would require him to pay the costs of a lienor who successfully challenges the items. You may also pass those questions on to the lienor who may wish to challenge them.

6. Verify the cost of issuing and recording the COR -- $30 for the Certificate, $11 for the first page of recording, and $5 for any additional pages that may be required due to exhibits.

7. Create a letter for each lienor stating the amount required to redeem through the end of that lienors redemption period, including the cost of issuing and recording the COR. Note that the amount required to redeem may change.

8. Send the letter along with a copy of the redemption statement to each lienor who has filed an intent to redeem. Along with this letter, remind the lienor of the start and end of the redemption period that applies, and the requirement to pay the redemption amount using one of the types of funds permitted under 38-37-108.

9. Save all documents.

10. If an amended redemption statement is provided, handle it following these same steps.

LIENOR REDEMPTION PAYMENTS

(38-38-302) 1. Verify that the funds provided by redeeming lienor are: a. Received within the redemption period, which ends at noon on the final day of the redemption period. b. Equal to or greater than the actual amount due. The redemption statement and cover letter will list the amount due through the final day of redemption, but the lienor may back out the per diem interest if redeeming before the final day. c. Proper funds (see subsection 2(d) under Cure Payments). The cost of issuing and recording the COR need not be certified funds. d. Accompanied by a certificate of lienor, if there are more junior lienors who have also filed intents to redeem. Review and process the certificate of lienor as you would the redemption statement. The certificate of lienor will be the amount paid to redeem, plus what is listed on the statement of lien amount provided with the intent to redeem. If the certificate of lienor is not provided, you may use the original lien statement provided under 38-38-302(1). The certificate of lienor may be amended up until the actual end of the redemption period to reflect additional fees and costs, which would be reviewed in the same way as a redemption statement.

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2. Unless the redemption is made on the final day of the period, calculate the actual amount due. a. Count the number of calendar days prior to the final day the redemption is made. b. Multiply the number of days by the per diem interest on the redemption figures letter. c. Subtract that product from the total due on the redemption figures letter. d. Write down the result as the actual Amount Due.

3. Provide a receipt to the lienor as well as the reminder that title will not vest until the end of all redemption periods, despite the redemption payment having been made.

4. Notify the COP holder, or the prior COR holder, that the redemption has been made.

5. If there are additional redemption periods, prepare a letter similar to what was prepared for the redemption statement, adding the cost of issuing and recording another COR to the amount listed on the certificate of lienor. Send that letter, along with the certificate of lienor, to the remaining lienors.

6. Note the date and amount of the redemption payment in your records.

7. Once funds have been finally credited to your account (check with your bank) -- create and record a COR.

8. Distribute the funds paid to redeem as follows: a. Retain the $30 COR fee as statutory revenue. b. Retain the cost of recording the COR, to be used to pay for the recording c. Send the amount due to redeem to the holder of the COP or the most recent COR d. Refund any overpayment to the redeeming lienor.

RELEASING A DEED OF TRUST

(38-39-102) 1. Verify that the Release Request Complies with the Law A. Release form addressed to you as Public Trustee B. Release form with acknowledged signature of holder (or title company), including title C. Need Power of Attorney or agency agreement if signee is not the actual holder D. Estate holder: need Letters Testamentary or Letters of Administration appointing personal representative E. Parties, dates and recording info on release match the deed of trust (and note, if presented) F. Deed of trust names a Public Trustee as Trustee G. Deed of trust has a legal description of property in your county H. Deed of trust was recorded in your county I. Original evidence of debt provided if release is with evidence of debt (bond if not original) J. Original note marked as cancelled (exact language not specified by law) K. Correct language (3a, 3b, or 3c) marked if release is without evidence of debt L. Corporate Surety Bond complies with legal requirements i. Bond must be issued by a vendor licensed in CO – verify with Insurance Commissioner ii. Bond must show the holder of the note as the “Principal,” public trustee as obligee iii. Bond must recite the deed of trust parties, dates, and recording information iv. Bond must be for 1.5 times the original principal amount of the evidence of debt shown on the Deed of Trust v. Bond must be valid for at least 6 years after recording of the release and until resolution of any claim made within that time period M. Full payment provided: $15 release fee, + $11 for recording first page, +$5 each extra page

2. Verify that the Release Request will be effective A. “Partial” box only checked if part of encumbered property listed for release B. Verify that property in a partial release was part of the deed of trust C. Small discrepancies in names are OK, but not major differences see 38-35-116

3. Handling discrepancies not accounted for in the language on deed of trust and note A. May use Affidavit of Multiple Deeds, used when more than one deed of trust secures a note B. May use Affidavit of Multiple Notes, used when a deed of trust secures more than one note C. May use Affidavit of Uneven Amounts/Dates, used when the deed and note do not match

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4. If rejecting release, return request, documents, and explanation to submitter. Don’t alter release.

5. Processing documents: A. Sign, date, and stamp release with Public Trustee seal. B. No requirement to stamp note or deed of trust C. Make copies of supplemental affidavits, powers of attorney, and bonds; record as attachment to release; retain in file original bond, copies of others D. Return original or certified documents to submitter – no need to return copies of deed of trust E. Separate money -- $15 to Public Trustee, rest to clerk and recorder F. Return any overpayment to submitter G. Send release to clerk and recorder, along with payment and power of attorney or bond

BANKRUPTCY FILINGS

(38-38-109(2)) 1. General Discussion A. A bankruptcy creates an automatic federal stay against all adverse actions being taken against the filer. B. If you receive a filing directly from the borrower, forward it to the holder’s attorney for review. C. The impact of a bankruptcy filing depends on its timing with respect to the foreclosure. D. There is often a delay of a few days or even longer between a filing, and your receipt of it. E. The stay is lifted by bankruptcy court-ordered dismissal, closure, relief granted, or abandonment of property by bankruptcy trustee. F. Relief takes effect 14 days after date of the order, unless otherwise stated; other orders effective on date of order unless state otherwise.

2. Bankruptcy (BK) filed prior to NED recording A. Stays the recording of the NED. Do not process the filing; return it to the attorney if requested. B. If the NED was already recorded, it is void. The foreclosure must be withdrawn. C. Upon lifting of stay: attorney may re-file the NED for recording.

3. BK filed prior to completion of all publications A. A BK filing on the final day of publication counts as prior to completion of all publications. B. Stop publications and do not send any pending mailings. C. Charge any incomplete publications to the file as a Public Trustee cost. D. Announce, post or provide notice of bankruptcy at sale scheduled when bankruptcy filed – do not continue.E. Upon relief from stay: re-record NED to restart foreclosure when directed by the attorney. F. Charge $75 for the restart, along with any other applicable costs.

4. BK filed after completion of all publications (notified prior to sale) A. Do not take property to sale. Allow sale date to automatically continue week-to-week. B. Upon relief from stay: calculate new final sale date such that there are the same number of days left in the one-year period from the scheduled sale date on the date the stay is lifted as there were on the scheduled sale date when the bankruptcy was filed. C. Re-request any missing cure statement (some attorneys will not provide it during stay

5. Sale held in violation of the BK stay (erroneous sale) – this applies also to sales set aside by court order A. Confirm reinstatement of the note and DOT using statutory language. B. If Deed issued, notify assessor that the Deed is void. C. Do not create and record non-statutory documents that would cancel the COP or Deed. D. Return sale proceeds to purchaser, if not already disbursed. E. Upon relief from stay if receive notice from holder or attorney to proceed within 60 days after stay is lifted (otherwise must be withdrawn): i. Charge $50 for resuming sale. ii. Calculate new final sale date (add the length of the stay to the final date) iii. If possible, set a new sale date 24-49 days after notified of relief (unless will be withdrawn) iv. Set a single publication within 20 days (and at least 10 days prior tosale). v. Mail a new combined notice within 10 days.

6. BK filed after sale (note time of sale and compare to time of filing) A. No real effect – title transfers by law, and redemption is a matter between the COP holder and lienors. B. May want to delay issuing Deed until relief granted, though Deed recipient may challenge this.

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INSTALLMENT LAND CONTRACTS

38-35-126 1. Obtain a copy of the recorded contract for your files. Have the buyer and the seller complete a form giving you their contact information. These statutes do not address the issue of sending a notice of the taxes paid each year from the escrow account to the purchaser but it is reasonable to expect that would be a part of proper accounting to the purchaser. Therefore, there does not appear to be a reason to collect purchaser identification numbers.

2. Collect $75 each year in advance from the purchaser. Statutes support issuing a receipt for this fee as well as each escrow deposit by the purchaser.

3. Open a separate bank account for the escrow. With proper accounting, multiple escrow accounts can deposit into the same bank account. The interest earned on the account will be revenue to the public trustee.

4. There is no indication that monthly notices are to be sent to the purchaser. It appears to be the purchaser’s responsibility to send the payment to you.

5. As soon as the tax roll is accepted by the treasurer, obtain information regarding the amount of the taxes due for the current collection year.

6. It would be reasonable to expect that if there is not enough money in the escrow account for full payment by April 30th you would contact the purchaser to notify them of the shortage. Best practice would be to notify by restricted delivery mail well in advance of the tax deadline.

7. It is imperative that the public trustee keep accurate records so the officer does not incur consequences for mishandling funds when in a position of trust.

8. Statute does not address required action if a purchaser does not make the payments as agreed. In 38-35-126 authorizes the public trustee to terminate the account after the deed to the real property is recorded, signifying the contract is fulfilled. It also states, “If the public trustee determines that the escrow is no longer necessary, the public trustee may terminate the account.” Upon termination, the public trustee gives any remaining amount in the escrow account to the purchaser if the deed to the purchaser is recorded and otherwise to the treasurer. If the treasurer does not accept an overpayment, the public trustee transfers the money to the person holding title to the real property.

STARTING A NEW FORECLOSURE

(38-38-101) 1. Review the attorney’s cover letter for special instructions (designation of publication, unusual default reason), and compare it to the documents received to ensure that the filing is complete.

2. You may generally disregard the following optional documents: A. Copies of statutes (better to provide your own, to be sure they are correct) B. Format for a Combined Notice (unless you do not generate one yourself) C. Certifications of mailing (returning these is not required)

3. Ensure the NED is signed with a bar number.

4. Ensure that the evidence of debt is an original, or if a copy that it is accompanied by a Certificate of Qualified Holder that specifies exactly what type of qualified holder the holder is. If redactions have been made to the evidence of debt, the Certificate must acknowledge and explain why they are required by law. Ensure the original principal amount on the evidence of debt matches the NED. A corporate surety bond valued at 1.5 times the original principal on the evidence of debt may substitute for the original evidence of debt. You also must receive modifications to the evidence of debt (originals if a not a qualified holder, copies if a qualified holder), though you will not necessarily know if these are missing. Verify that the evidence of debt was signed. If not a qualified holder, verify any chain of assignments from the original holder to the current holder. Indorsements and assignments may be originals or certified copies.

5. Ensure that you have an original or certified copy of the recorded deed of trust, or if a copy that it is accompanied by a Certificate of Qualified Holder that specifies exactly what type of qualified holder the holder is. If redactions have been made to the Deed of Trust, the Certificate must acknowledge and explain why they are required by law. Ensure the original parties, dates, recording information, and legal description on the Deed of Trust exactly match the NED. You also must receive any recorded modifications to the Deed of Trust and

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any partial releases from the Deed of Trust (original or certified copy if a not a qualified holder, copies if a qualified holder), . Verify that the Deed of Trust was signed and notarized, and that it matches the information on the evidence of debt. Verify that the Deed of Trust names a Public Trustee and that it includes property in your county.

6. Review the mailing list for obvious omissions, such as any grantors or “occupant.”

7. Review any recorded scrivener’s affidavit modifying the Deed of Trust to make sure it explains the changes and complies with 38-35-109(5). The affidavit should be the original or a certified copy if a not a qualified holder, copy if a qualified holder .

8. Note the name of the loan servicer in the file.

9. Note the statement regarding the current owner.

10. Note the presence or absence of a document indicating deferment eligibility.

11. Verify that the NED matches the information on the DOT and evidence of debt. The NED must contain the names of the original grantors and beneficiaries of the DOT, the date of the DOT, date and county of recording and recording information, including reception number or book and page, state the type of default, a statement regarding whether all or some of the encumbered property is in foreclosure, and state the original and current outstanding principal balance. The NED must have a name, business phone number, address and bar registration number for the attorney and a description of any changes to the DOT based on recorded scrivener’s error affidavit and recording date and recording information.

12. Verify that you have the required deposit – this may be up to $650, or the Public Trustee fee, whichever is more.

13. Record the NED (do not wait for agricultural determination)

14. Determine the agricultural status of the property. It is agricultural only if all of the following are true: A. No part of the property was in an incorporated city or town when the DoT was recorded or is now. B. No part of the property has been in a platted subdivision. C. No part of the property has been assessed as other than agricultural since the DoT was recorded.

14. Set sale date – 110-125 days after NED recording if not agricultural; 215-230 days if agricultural

PUBLICATIONS AND MAILINGS

MAILINGS 38-38-103, 38-38-904 1. Check the file for any submitted amended mailing lists. Sometimes an amended list will be submitted prior to the first mailing. Use the most recent list available.

2. Whether your office accepts envelopes, prints envelopes, or places labels on blank envelopes, insert a copy of the latest combined notice and applicable statutes.

3. Check to make sure there is an envelope being sent to every address submitted on the mailing list (or most recent mailing list) by the foreclosing party.

4. It is helpful to note on the lower left corner the file number.

5. Returned mail should be placed unopened in the file for the length of time stated on the Record Retention Schedule adapted by your office and approved by the state. It is undecided at this time whether the certificate of mailing serves all purposes for which the returned mail has been kept.

6. It is best practice to complete a certificate of mailing. This certifies how many envelopes were mailed and to whom. The document should include the file number, date, signature and or amended mailing list. Some offices have a separate procedure for verifying the mailing list used and the number of envelopes in the mailing. Often this is called a verification of mailing.

7. If envelopes are prepared in advance of the mailing date, it is important that the person actually mailing them check again to see if there is a new amended mailing list and count the envelopes again.

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8. Enter any charges for copies, envelopes, and postage into your foreclosure system.

9. Waiting to send mailings until close to the deadline allows property owners a little more time to cure without incurring additional costs. It also allows time for the attorney to submit an amended mailing list. Mailing significantly before the deadline increases the risk of having to make a third mailing, thus adding expense to the file.

10. Some offices accept preprinted envelopes from the attorneys. They must still submit a mailing list. The names and addresses on the envelopes must be verified against the mailing list for accuracy.

PUBLICATIONS

38-38-103, 38-38-904 1. Upon recording the NED, prepare a CN in the format accepted by your publisher to send to the appropriate newspaper for publication. Attach any exhibits included in the foreclosure. Whether you send it immediately to the publisher or wait until close to the deadline is dependent upon your office procedures.

2. If you send your publication upon opening the file, you must remember to cancel that publication, and in some cases submit a corrected document, when certain activities require a change in publication dates. For instance, if a file is eligible for deferment and the affidavit of posting is not received timely in your office, notify the attorney once and then make sure that no publications are made until receipt of the affidavit.

3. When the publisher sends you a copy of the notice as it will be printed in the paper, review it for accuracy.

4. Each time a publication is scheduled to be printed, check the newspaper to verify that it is present and accurate. If the newspaper misses publishing for one week, publication must start anew and run for 5 consecutive weeks in a standard foreclosure or 4 consecutive weeks for an expedited foreclosure.

5. After payment has been made for the publication, the publisher must issue an affidavit of publication. At this time, proof of publication is a permanent record that must be retained. Providing this document on your web site will reduce the number of calls you receive from attorneys requesting it.

WITHDRAWING A FORECLOSURE

38-38-109(3) 1. The law does not specify the format to use for a withdrawal. In order to get the withdrawal of the NED properly indexed against the NED, the paperwork should include the foreclosure file number, the recording information from the Notice of Election and Demand, the names of the grantor and holder, and be signed by the holder or the holder’s attorney. No legal description is required.

2. The withdrawal is also signed by the Public Trustee or a Deputy after being reviewed.

3. The fee for a withdrawal is $35. Also collect the recording fee (usually $11).

4. Be sure to cancel any remaining publications, and receive any outstanding fees from the lender, before processing the withdrawal. If you have not received the balance due, do not consider the withdrawal as filed – hold the file and do an administrative withdrawal if necessary. If there is a balance due back to the lender from the initial deposit, refund it.

5. If the sale is not withdrawn by the attorney within 45 days after the last possible sale date (which is one year from the initial sale date, plus any time added during a bankruptcy stay or injunction), notify the attorney that you will be administratively withdrawing the file in 30 days.

6. During that 30 days, the attorney may file an ordinary withdrawal or ask for an extra 90 days.

7. At the end of the 30 days, or the extra 90 days if requested, create, sign and record an administrative withdrawal with the same information as on an ordinary withdrawal.

8. The fee for an administrative withdrawal is $50, Also charge the recording fee (usually $11).

9. You then charge interest on the unpaid balance at an annual rate of 8%, charged monthly.

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10. Do not do an administrative withdrawal during a bankruptcy stay. It is void if you do. .

PREPARING FILES FOR SALE

38-38-105, 38-38-106 The holder/attorney for holder must submit a bid and order authorizing sale no later than noon two business days prior to the scheduled date of sale. 1. The Order Authorizing Sale (38-38-105) must be submitted no later than noon 2 business days prior to the date of the sale. The order must recite the hearing completion or (if no hearing) the hearing scheduled date was at least 16 days prior to the currently scheduled date of sale. The OAS must be complete and must contain the following: A. civil action number B. date of the order C. the date the hearing was scheduled if no hearing was held, or the date the hearing was completed if a hearing was held D. language in or on the order or a court added attachment to it stating that the order was granted or that the PT is authorized to go to sale E. recording information of the DOT consisting of at least either the book and page or reception number F. legal description of the property authorized to be sold G. PT sale number [in all but circumstances where this is not possible such as described above, and the PT can confirm that the OAS is referencing the current default on which the foreclosure is based] H. all attachments to the order.

2. The bid (38-38-106) should be proofed for accuracy and must recite all pertinent information indicated on the bid form regarding amounts, name and address of the foreclosing lender, date of the sale and the interest rate at the time of sale. The bid must be signed and acknowledged by the foreclosing lender or signed by the attorney for the lender. If signed by the attorney for the lender, verify that the attorney’s registration number, phone number and address are indicated on the bid.

3. If the bid recites a lender other than the lender on the Notice of Election and Demand, the holder/attorney must have provided you with a “Transfer of Debt” per 38-38-101 8(a).

4. Before entering the bid information into your system, make sure you have received all of the balance of your fees and costs. If you have not received all fees and costs due, you may not have any leverage to collect if the sale has already occurred. At this time you can also verify the bid reflects the correct amount of total Public Trustee fees and costs.

5. If a bid is timely submitted but then is amended in writing by the holder/attorney for holder, it must be received in your office no later than noon 1 business day prior to sale, or if this deadline is not met, it may be verbally amended and re-executed by the holder or authorized representative for the holder at the beginning of the sale.

6. If you do not receive an Order Authorizing Sale and a Bid, the sale must be continued for at least one week. Most often, you will receive a written request for continuance from the holder/attorney for holder. If you do not receive a written request to continue in a timely manner, then the public trustee may continue for cause or take no action and allow the sale to automatically continue.

7. Once all bids and continuances (38-38-109) are entered into your system, a Pre-Sale list and Continuance list should be prepared and made available to the public via a website or posted in your office in order to give as much advance notice of the bid amount prior to the sale as possible.

8. A final version or a Post-Sale list and Continuance list should then be posted after the sale which would reflect any sales that were pulled at the last minute and continued and any overbids that resulted from outside bidders.

9. Determine what method will be used to provide this information to the general public. If utilizing a website or if you are posting within your office, the same method should be consistently followed from week to week. 10. After the sale prepare a COP which contains all of the information indicated in 38-38-401. The COP must be prepared and recorded on or before the 5th business day after the sale.

ISSUING A CONFIRMATION DEED

(38-38-501)

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1. For foreclosures with an NED recorded on September 1, 2012, or later, a Public Trustee Confirmation Deed is issued at a certain point after sale, or sooner if requested (38-38-501). Fees for issuing and recording the Deed are included in the bid at sale -- $30 for the Deed, $11 for recording the first page, and $5 for each additional page.

2. Absent any communication from the Certificate holder, issue the Deed on the 11th business day after title vests (the deadline for delivering an assignment is 10 business days after title vests). The Deed must be issued and recorded no later than the 15th business day after title vests, or the Public Trustee forfeits a 5% of the Deed Fee per day thereafter.

3. The Deed may be issued anytime after title vests if a written request is made by the current holder of the COP or COR, which must include a statement that no (additional) assignments of the Certificate will occur. Verify that the request comes from the correct party.

4. The COP or COR is assignable to other parties up until the moment title vests (noon on the final day of redemption, or close of business on the 8th business day after sale if no intent to redeem is filed. A late assignment will be rejected, and the Deed issued to the prior (and still legal) holder. The assignment must be received no later than the 10th business day after title vests to be honored. For the assignment to be valid, it must be: A. Received by you within 10 business days after the vesting of title, B. Dated and signed prior to the time title vests, AND C. Recorded or notarized (acknowledged) prior to the vesting of title (the assignment need not be recorded if it was acknowledged prior to the vesting of title)

5. A valid assignment must include, per 38-38-403: A. The name and address of the assignee B. The name and address of the assignor (must match Certificate holder or prior assignee) C. A description of the property (legal description is best, but not required) D. The name of the foreclosing holder of the evidence of debt E. Our foreclosure number

6. Upon request as described in paragraph 3 above, after title vests, or on the 11th day after title vests, issue the Deed to the correct party. The Deed will be issued to: A. The final assignee of the final COR, if any, or to B. The COR recipient if the COR has not been assigned, or to C. The final assignee of the COP if there was no redemption, or to D. The COP recipient if the COP has not been assigned and there was no redemption. 7. The form of the Deed is specified in 38-38-502. 8. Record the Confirmation Deed

RESCISSION

(38-38-113) 1. Rescission can only be requested after sale if the property was purchased by the foreclosing holder. Sales to third parties can only be set aside judicially.

2. The Notice of Rescission of Sale (RSN) must be filed by the Purchaser at sale, or an assignee or the attorney for the purchaser or assignee, no later than 8 business days after the date of sale. The Notice must include A. The foreclosure file number B. The date of sale C. The name of the person to whom the COP was issued D. The name of any assignee E. The reception number or book and page and recording date of the COP F. Legal description of the property being foreclosed G. Acknowledged signature by the COP holder or assignee or signature of attorney with bar number H. A statement that the sale is being rescinded

3. Do not process the rescission until you have received $100 for the fee, and the cost of recording the RSN.

4. Add an endorsement to the Note and Deed of Trust as described in statute.

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5. Mail the recorded RSN to the most recent amended mailing list (if none, the mailing list) in the stamped envelopes provided by the person rescinding for that purpose. The notice must go out within 10 days after receive notice, funds and envelopes; if the envelopes do not arrive, restart the foreclosure for missed deadlines.

6. The file is now in its pre-sale condition, with the same final sale date.

7. At the direction of the holder, assignee or attorney, set a new sale date 30-45 days from such notice. Charge $50 for resuming sale.

8. Schedule a single publication within 20 days of the notice to reschedule the sale.

9. Mail a combined notice with the new sale date to the latest mailing list within 10 days of the notice to reschedule.

OVERBID FUNDS

38-38-111 1. If an overbid occurs on a foreclosure with a deficiency bid, a check to the lender must be issued for the bid amount plus any overbid proceeds up to the deficiency amount. Process the check according to your office policy, generally holding for a minimum of 4 days to make sure the funds tendered at sale have finally cleared your bank.

2. If there are still overbid proceeds remaining after paying the deficiency, or if there was no deficiency, the proceeds are held in escrow by the Public Trustee until the end of all redemption periods described in 38-38-302.

3. After all redemption periods have expired (or title has vested) the proceeds go to junior lienor(s) that have filed a Notice of Intent to Redeem and whose liens have not been redeemed (including the last redeeming lienor). The funds are paid in order of redemption priority. If a lienor’s lien has been paid off through the redemption process that lienor would have no right to any overbid proceeds. A lienor that accepts less than a full redemption or that has filed a late intent to redeem would not have any right to the overbid proceeds.

4. Any remaining overbid proceeds are paid to the property owner as of the date the NED was recorded. Check with your Assessor’s office to verify ownership (note – be sure assessor records are sufficiently current). Do not rely on the attorney’s statement that was filed with the NED.

5. If overbid proceeds remain unclaimed and are in excess of $25.00, you must make a reasonable effort to locate the owner’s current address and mail a notice regarding the overbid proceeds to that address no later than 30 days after the expiration of all redemption periods per 38-38-302. If not claimed within 5 years from the date of the sale, disburse funds to the State Treasurer in accordance with “Unclaimed Property Act”.

6. If any overbid proceeds in excess of $500.00 that have not been claimed by any person entitled to such funds, within than 60 calendar days from the expiration of all redemption periods, commence publication of a notice described in 38-38-111(3)(b) within 90 days after expiration of all redemption periods. Mail a copy of the notification to the best available address for the owner. The cost of the publication and mailing will be paid for from the overbid proceeds. If unclaimed for five years from date of sale, disburse the balance of the funds to the State Treasurer in accordance with “Unclaimed Property Act”.

FORECLOSURE MISC. (Transfer of Debt, Partial Release, Late Amended Mailing List)

PARTIAL RELEASE DURING FORECLOSURE 1. Per C.R.S. 38-38-101(9), if there is a partial release of property during a foreclosure, the attorney is to amend the NED to reflect the release. We record the amended NED, create an amended CN that reflects the release, and mail and publish the amended CN.

2. The statutes are unclear with respect to how the attorney goes about amending the NED. It is recommended that you require the attorney to provide an amended NED referencing the original NED, 38-38-101(9), and the recording information of the partial release.

3. Review the copies of the recorded partial release (certified copy if not a qualified holder). The partial release must be reflected on the amended NED, and the partial release must have occurred after the NED was recorded. If the partial release pre-dates the NED, then the foreclosure must be withdrawn.

4. Continue the sale, if necessary, to at least 65 days later than the date of recording the amended NED.

5. Cancel any remaining publications, and reschedule a new set of publications reflecting the new sale date.

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6. Mail a new combined notice to the most recent amended mailing list (if none, the mailing list).

7. Collect the $100 fee.

TRANSFER OF DEBT DURING FORCLOSURE 1. Per C.R.S. 38-38-101(8), the holder or attorney must notify you if the evidence of debt is transferred to a new holder

2. If the transfer is from one qualified holder to another, you do not need a new certification of qualified holder, but the holder or attorney must provide a signed statement that states that the assignee is a qualified holder. If the transfer is from a qualified holder to a non-qualified holder, you need the documents required from a non-qualified holder under 38-38-101(1)(b) and (c), or the replacements open to non-qualified holder. If the transfer is from a non-qualified holder, then you already have the documents you need.

3. Change the holder in any unstarted publications or unsent mailing, but you do not need to remail or republish if those steps are complete.

4. Verify the bid against the name of the holder to make sure they agree.

LATE AMENDED MAILING LIST 1. Per C.R.S. 38-38-103(2), if you get an amended mailing list after the second mailing has been sent, you will need to continue the sale until at least 65 days after the receipt of the latest amended mailing list, and send the combined notice to all parties on the last amended mailing list.

2. This applies even if the deadline for the 2nd mailing has not passed. This is a good reason to send the 2nd mailing toward the end of the 2-week window.

TABLE OF ACRONYMS

BK Bankruptcy COP Certificate of Purchase COR Certificate of Redemption DA District Attorney DOT Deed of Trust HOA Homeowners Association NED Notice of Election and Demand OAS Order Authorizing Sale PT Public Trustee PTAC Public Trustee Association of Colorado

LEGAL OPINIONS

REQUIRED ELEMENTS OF OAS

Rich Krohn, October 12, 2013 Proposed changes to the Manual concerning 38-38-105 1. In my opinion the name of the grantor(s) of the DOT is not required to be included in the OAS, either in its caption or in the body of the order.

38-38-105(1) says the OAS must recite the date the hearing was scheduled if no hearing was held, or the date the hearing was completed if a hearing was held. Either date must be no later than the day before the last day a NOIC maybe filed – that is at least 16 days prior to the actual sale date. Although not specifically mentioned in the statutes, it is clear that the OAS must indicate that it was granted in order to be effective. This could appear, for example, in a court stamp at the top of the order, in the body of the order, or in an additional sheet appended to the form of order stating that the attached order was granted. Similarly, there must be some indication that the court actually approved the order, so the signature of the judge/magistrate should appear on the order or appended sheet described above. The signature can be actual or stamped. As a best practice, I recommend against accepting an OAS with merely a typed indication the order was signed, such as “/s/ Judge ______” or “original signed by the court” because of the ease with which an OAS could be falsified in this manner. Rule 120 requires that the motion and notice include a description of the instrument being foreclosed and the property sought to be sold. Obviously it is critical that the PT be able to ascertain that the OAS applies to the particular DOT filed with the PT and the property being foreclosed described in the NED [for example if less than all of the property encumbered by the DOT is being foreclosed]. For that

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reason, in my opinion, a PT should require that the OAS include the recording information of the DOT, consisting of at least either the reception number or book and page of recording and a legal description of the property authorized to be sold for comparison with the NED and DOT. 38-38-401(1)(h) says the OAS attached to the recorded COP must contain the PT sale number. In my opinion, a conservative reading of the statutes requires that the PT sale number must be included in or on the OAS. This makes sense from the standpoint of being certain that the order in fact addresses the defaults which are the subject of the current foreclosure and not possibly some prior foreclosure of the same DOT. Generally, then, the holder should include the PT sale number in the OAS submitted to the court for signature. However, there is no requirement in Rule 120 that this information be included in the OAS, motion or notice, so conceivably this information could be added by the PT in certain unusual circumstances described below. Nothing expressly requires that the 120 be conducted after the foreclosure has been started. This means the holder could file the 120 before the foreclosure, in which case the PT sale number obviously could not be included in the OAS when signed. This means to me that a PT could accept an OAS without the sale number on or in it and add it prior to recording the COP if the PT is satisfied that the OAS applies to the current foreclosure. This happened recently where the holder asserted that certain partial releases of the DOT the holder was seeking to foreclose had been recorded inadvertently and erroneously. I recommended that the PT initially reject the foreclosure with a legal description not including those releases. However, to avoid the time and expense of a judicial foreclosure, I opined that the PT could do the foreclosure with a legal description disregarding the releases if the OAS authorized the foreclosure of the DOT with the language of the order clearly authorizing a sale using a legal description expressly disregarding the releases. This was accomplished by the holder obtaining the OAS in advance of commencement of the foreclosure and providing the OAS to the PT at the time the foreclosure was filed. The OAS had a current date, and it was clear from the language of the OAS that the court had considered the default that was the subject of this current foreclosure and had authorized that the releases be disregarded by the contents of the order and the legal description of the property authorized to be sold by the OAS. Under these unusual circumstances, in my opinion the PT was justified in accepting the OAS without the sale number, which obviously could not have appeared in the OAS as it was obtained before the foreclosure was filed. The PT could then add the sale number to the copy of the OAS attached to the COP in order to comply with the requirements of 38-38-401(1)(h). Obviously the PT must be able to review the entire OAS, so all attachments must be included in the OAS submitted to the PT and attached to the COP. 2. In summary, in my opinion all items stated in the manual as being required of an OAS are necessary other than (g) the name of the grantor of the DOT, which does not appear to be required by statute or for practical or process reasons, and [under specific circumstances] (d) the public trustee sale number. However, certain other information is also required that is not currently addressed in the manual. Therefore, I would change the manual to require that the OAS include

A. civil action number B. date of the order C. the date the hearing was scheduled if no hearing was held, or the date the hearing was completed if a hearing was held D. language in or on the order or a court added attachment to it stating that the order was granted or that the PT is authorized to go to sale E. recording information of the DOT consisting of at least either the book and page or reception number F. legal description of the property authorized to be sold G. PT sale number [in all but circumstances where this is not possible such as described above, and the PT can confirm that the OAS is referencing the current default on which the foreclosure is based] H. all attachments to the order

RELEASES SIGNED BY NTC/WELLS FARGO EMPLOYEES AS QUALIFIED HOLDERS

Rich Krohn, October 31, 2013 I have spoken with Myron Finley, Chief Legal Officer for National Title Clearing, Inc. NTC has agreed to remove the language set out below from its releases and to change the acknowledgement to reflect that the signer is vice president of the qualified holder entity that is the holder of the EOD secured by the DOT being released. With these changes, in my opinion the releases should be accepted if this is the only reason the release is being rejected. Separately, the releases utilize a form of acknowledgment different from a Colorado statutory acknowledgment format. This form appears to contain the elements that would be inferred by our statutes from use of a Colorado form of acknowledgment, so use of a Colorado statutory form of acknowledgment is not required. Language to be deleted from NTC releases:

DOCUMENTS

OATH OF OFFICE

OATH OF OFFICE _________________ COUNTY PUBLIC TRUSTEE

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State of Colorado ) ) SS County of ________) I, _____________________, do solemnly affirm that I will support the Constitution of the United States and the Constitution of the State of Colorado, and that I will faithfully perform the duties of the office of ____________ County Public Trustee to the best of my skill and ability, with such office taking effect ___________________. ________________________________________ (Type Name of public trustee) Subscribed and sworn to before me this _____ day of ______________, ______ by _______________________, who did personally appear before me. My Commission expires: ___________________________________________ (Type Name of administrator of the oath) (Type Office of administrator of the oath)

APPOINTMENT OF DEPUTY WITH OATH

APPOINTMENT OF DEPUTY WITH OATH THIS IS TO CERTIFY that I have this day appointed, and do hereby appoint _______________________________ As Deputy Public Trustee in and for the County of _____________________________, State of Colorado, with full power and authority to act as authorized by me during my term of office, unless this appointment should be sooner revoked. WITNESS my hand and seal this _____ day of _____________________, ________. _________________________________________________ (Type Name of appointing public trustee) _______________ County, Colorado Subscribed and sworn to before me this _____ day of ______________, ______ by _______________________, who did personally appear before me. My Commission expires: ___________________________________________ (Type Name of administrator of the oath) (Type Office of administrator of the oath)

REVOCATION OF APPOINTMENT AND OATH OF DEPUTY PUBLIC TRUSTEE

REVOCATION OF APPOINTMENT AND OATH OF DEPUTY PUBLIC TRUSTEE STATE OF COLORADO ) )SS. COUNTY OF __________ ) I, ________________, the duly appointed/elected Public Trustee of ______________ County, Colorado, hereby revoke the appointment and oath of ________________, Deputy Public Trustee, effective as of ____________, ______. Dated _________________, _____ ____________________________________ (Type Name of public trustee) ________________ County Public Trustee Subscribed and sworn to before me this _____ day of ______________, ______ by _______________________, who did personally appear before me. My Commission expires: ___________________________________________ (Type Name of administrator of the oath) (Type Office of administrator of the oath)

CURE STATEMENT

Cure Statement To: _________________________________________________________________________________________ Public Trustee (or Sheriff) of the County (or City and County) of ________________, State of Colorado (hereinafter the “officer”) Foreclosure sale number: ________________________________ Granter: ________________________________ The date through which the

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cure statements is effective ________________________________ The following is an itemization of all sums necessary to cure the default (any amount that is based on a good faith estimate is indicated with an asterisk): Payments due under the evidence of debt: _____ payments of $_____________ each ____________________ Accrued late charges ____________________ Other amounts due under the evidence of debt (specify) _____________________________ ____________________ _____________________________ ____________________ Property Inspections ____________________ Property general liability and casualty insurance ____________________ Certificate of taxes due ____________________ Property taxes paid by the holder ____________________ Owner association assessment paid by the holder ____________________ Permitted amounts paid on prior liens ____________________ Less impound/escrow account credit ____________________ Plus impound/ escrow account deficiency ____________________ Title costs ____________________ Rule 120 docket fee ____________________ Rule 120 posting costs ____________________ Court costs ____________________ Postage delivery costs ____________________ Service/posting costs ____________________ Attorney fees ____________________ Other fees and costs (specify _____________________________ ____________________ _____________________________ ____________________ Reinstatement total (does not include officer’s fees and costs) $___________________ Officer’s fees and costs (To be added by officer) $___________________ Total to cure $____________________ IT MAY TAKE SEVERAL DAYS BEFORE THE CURE IS PROCESSED AND ENTERED INTO THE HOLDER’S RECORDS. The total to cure does not include any future monthly mortgage payments that may be due. Name of the holder of the evidence of debt and the attorney for the holder: Holder: _________________________________________________________ Attorney: _______________________________________________________ Printed Name: ___________________________________________________ Signature: ______________________________________________________ Attorney Address: ________________________________________________ Attorney Business Telephone: ______________________________________

BID

(Onsite) BID To:___________________________________________________________________________________ Public Trustee (or Sheriff) of the County (or City and County) of _____________, State of Colorado (hereinafter the “officer). Date:_____________________________ _______________, whose mailing address is _____________________________________________, bids the sum of $__________ in your Sale No. _________ to be held on the _______day of ______, 20____. The following is an itemization of all amounts due the holder of the evidence of debt secured by the deed of trust or other lien being foreclosed. Street address of property being foreclosed, if known: ________________________________________ Regular [ ] / default [ ] rate of interest as of the date of sale:________________ (Inapplicable items may be omitted): Amounts due under the evidence of debt: Principal $__________ Interest __________ Late charges __________ Allowable prepayment penalties or premiums __________

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Other amounts due under the evidence of debt (specify) __________ __________ __________ __________ Category Subtotal $__________ Other fees and costs advanced by the holder of evidence of debt: Property, general liability, and casualty insurance __________ Property inspections __________ Appraisals __________ Taxes and assessments __________ Utility charges owed or incurred __________ Owner association assessment paid __________ Permitted amounts paid on prior liens __________ Less impound/escrow account credit __________ Plus impound/escrow account deficiency __________ Other (describe) __________ Category subtotal $__________ Attorney fees and advances: Attorney fees __________ Title commitments and insurances or abstractor charges __________ Court docketing __________ Statutory notice __________ Postage __________ Electronic transmissions __________ Photocopies __________ Telephone __________ Other (describe) __________ Category subtotal: $__________ Officer fees and costs: Officer statutory fee __________ Publication charges __________ Confirmation deed fee __________ Confirmation deed recording fee __________ Other (describe) __________Category subtotal: $__________ Total due holder of the evidence of debt __________ Bid $__________ Deficiency $__________ I enclose herewith the following: 1. Order authorizing sale. 2. Check (if applicable) to your order in the sum of $__________ covering the balance of your fees and costs. 3. Other:_________________________. Please send us the following: 1. Promissory note with the deficiency, if any, noted thereon 2. Refund for overpayment of officer’s fees and costs, if any 3. Other: ________________________. Name of the holder of the evidence of debt and the Attorney for the holder” Holder:_____________________________________ Attorney:___________________________________ By:________________________________________ Attorney registration number: __________________ Attorney address:____________________________ Attorney business telephone:___________________ (Electronic) BID To:___________________________________________________________________________________ Public Trustee (or Sheriff) of the County (or City and County) of _____________, State of Colorado (hereinafter the “officer). Date:_____________________________ _______________, whose mailing address is _____________________________________________, bids the sum of $__________ in your Sale No. _________ to be held on the _______day of ______, 20____. The following is an itemization of all amounts due the holder of the evidence of debt secured by the deed of trust or other lien being foreclosed.

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Street address of property being foreclosed, if known: ________________________________________ Regular [ ] / default [ ] rate of interest as of the date of sale:________________ (Inapplicable items may be omitted): Amounts due under the evidence of debt: Principal $__________ Interest __________ Late charges __________ Allowable prepayment penalties or premiums __________ Other amounts due under the evidence of debt (specify) __________ __________ __________ __________ Category Subtotal $__________ Other fees and costs advanced by the holder of evidence of debt: Property, general liability, and casualty insurance __________ Property inspections __________ Appraisals __________ Taxes and assessments __________ Utility charges owed or incurred __________ Owner association assessment paid __________ Permitted amounts paid on prior liens __________Less impound/escrow account credit __________ Plus impound/escrow account deficiency __________ Other (describe) __________ Category subtotal $__________ Attorney fees and advances: Attorney fees __________ Title commitments and insurances or abstractor charges __________ Court docketing __________ Statutory notice __________ Postage __________ Electronic transmissions __________ Photocopies __________ Telephone __________ Other (describe) __________ Category subtotal: $__________ Officer fees and costs: Officer statutory fee __________ Publication charges __________ Confirmation deed fee __________ Confirmation deed recording fee __________ Other (describe) __________ Category subtotal: $__________ Total due holder of the evidence of debt __________ Initial Bid $__________ Deficiency $__________ Maximum Bid $__________ (Applies to electronic bids only) I enclose herewith the following: 1. Order authorizing sale. 2. Check (if applicable) to your order in the sum of $__________ covering the balance of your fees and costs. 3. Other:_________________________. Please send us the following: 1. Promissory note with the deficiency, if any, noted thereon 2. Refund for overpayment of officer’s fees and costs, if any 3. Other: ________________________. Name of the holder of the evidence of debt and the Attorney for the holder” Holder:_____________________________________ Attorney:___________________________________ By:________________________________________ Attorney registration number: __________________

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Attorney address:____________________________ Attorney business telephone:___________________

PUBLIC TRUSTEE POLICIES

Courtesy of Thomas Mowle, El Paso County Public Trustee Public Trustee Policies (Print on letterhead) 1. No cell phone usage within the office or reception area, or at sale. Please step into the lobby or hallway to make or receive calls.

2. Deeds of trust will be released while you wait only if you are a private party. Releases requested by institutions will be processed roughly in the order received, whether they are dropped off or mailed in. The one exception to this rule will be for partial releases with production of the evidence of debt. Such releases will be processed by 9:00 on the following business day and held for pick-up.

3. We do not keep records on the releases of deeds of trust. It is not feasible to look for a specific release request. Check the Clerk and Recorder’s website to see if your request for release has been reviewed and recorded -- http://car.elpasoco.com/Recording.

4. Sales are held on Wednesdays at 10 a.m. in the Office of the Public Trustee, 105 East Vermijo, Suite

101. Parties interested in bidding must be personally in attendance at the sale and bid at least $50.00 over the lender’s bid. Starting with the 23rd bid on a given property, the bid increment must be at least $500 more than the previous bid. Funds for the full amount of the bid must be tendered to the El Paso County Public Trustee at the close of bidding on each property. 5. Per statute (C.R.S. 38-37-108), all payments made for redemption, cure, or purchase at sale “shall be in the form of cash, electronic transfer to an account of the public trustee available for such purpose, or certified check, cashier’s check, teller’s check, or draft denominated as an official check that is a teller’s check or a cashier’s check as those terms are defined in and governed by the “Uniform Commercial Code”, title 4, C.R.S., made payable to the public trustee, and certified or issued by a state-chartered bank, savings and loan association, or credit union licensed to do business in the state of Colorado or a federally chartered bank, savings bank, or credit union.” No exceptions.

6. If a refund is owed to you from a cure, redemption, or sales payment, that refund will be tendered on the fourth business day after the funds were deposited, unless we have reason to believe that additional time is necessary to verify clearance of funds.

7. Any discussions with other bidders need to be done outside this office and not during the sale. Bidders will not conduct financial transactions with other bidders at the sale or in this office at any time.

8. Neither the Public Trustee nor his deputies may give legal advice.

9. Neither the Public Trustee nor his deputies may recommend specific attorneys, title companies, or any other service provider.

10. Neither the Public Trustee nor his deputies will verify the order of liens on any property. For information on that, contact the Clerk and Recorder -- http://car.elpasoco.com/Recording.

11. We do not offer foreclosure counseling. Call the Colorado Foreclosure Hotline at 877-601-HOPE.

12. We charge 25 cents per page for all copies. We do not provide change without a transaction.

13. Unless the documents have separately been recorded, we will record supplemental information as additional pages to Releases of Deeds of Trust and Public Trustee Confirmation Deeds. Examples of such documents include powers of attorney, lost instrument bonds, and assignments of Certificates of Purchase or Redemption. There will be an additional $5 per page charge for the recording. We strongly encourage the separate recording of an assignment of a Certificate of Purchase or Redemption, and will be happy to record it for the recording fee of $11 for the first page and $5 for each additional page.

14. Our business hours are 8:30 to 4:30 weekdays, except legal holidays.

PUBLIC TRUSTEE SALE PROCEDURES

Courtesy of Thomas Mowle, El Paso County Public Trustee El Paso County Sale Procedures

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(Modify to meet your procedures) 1) Sales are held on Wednesdays at 10 a.m. in the Office of the Public Trustee, 105 East Vermijo, Suite 101, Colorado Springs. Enter our office after 9:45 through the door off the west hallway. 2) During the sale, there will be no side discussions with, announcements to, or financial transactions among the bidders or others present at sale. Any such may potentially be a violation of C.R.S. 6-4-106, bid-rigging; 18-8-306, attempt to influence a public servant; or 18-9-108, disrupting lawful assembly. 3) Once in the sale area, please respect the fact that our deputies are continuing work prior to and during sale. Do not disrupt our operations – this may potentially be a violation of C.R.S. 18-18-102, obstructing government operations; or C.R.S. 18-9-110, public buildings – trespass, interference. The building lobby near the elevators would be a better location for conversation. 4) Cell phones and other noisemaking electronic devices are to be turned off during the sale. 5) Sale begins with the Public Trustee or a deputy reviewing these procedures, and selected established policies (posted in the office and on the website). 6) The Public Trustee does not read the details on each individual property. These details are on the pre-sale list, which is available at the sale in limited quantities, in our office on Wednesday morning at no charge, and on our website by early Tuesday afternoon. Since lenders can submit written amendments to their bids until Tuesday noon, we do not post the pre-sale list until that time. Where the presale list refers to an Exhibit A, that Exhibit is available in our office and also on our website. 7) Next, the Public Trustee announces sales that have been continued from the pre-sale list. 8) The Public Trustee accepts the timely written bids, submitted by the lenders, that remain on the sale list and asks if there are any other bids on any of the properties on the sale list. 9) Bidding proceeds on properties, in the order in which competitive bid information sheets are given to the Public Trustee. In most cases, several sheets are turned in just prior to sale. The information on these sheets is not disclosed to others until bidding begins on that property. 10) The competitive bid information sheet must be turned in prior to bidding on a property. It must be legible, identify the property, and give the name of the bidder for the Certificate of Purchase and contact information. 11) Bidding rotates among bidders in the order the competitive bid information sheets were provided. Bidders may join, drop out, and rejoin the bidding at any point while the bidding is going on. 12) When bidding stops, the high bidder provides payment to the Public Trustee prior to the property actually being sold. 13) The Public Trustee reviews the funds provided. All cash is counted twice in the presence of the bidder and marked with a counterfeit detection pen. If $10,000 or more in cash is provided, the bidder must also fill out IRS and Homeland Security paperwork. If a wire transfer is used for payment, the Public Trustee must have verified receipt of the transfer prior to sale, and the transfer must include the wire transfer fee, currently $12. All checks must be properly signed by the bank, add up to at least the amount of the high bid, be payable to “El Paso County Public Trustee”, and be marked as either an official, teller, cashier’s, or certified check.157 14) If funds are not sufficient, or are defective, the bidding is backed up to the bid following the highest bid for which the high bidder had sufficient funds, and resumed from that point to determine the new high bidder. If there were no other bidders, the property is returned to the sale list and may be bid upon later. 15) Persons who fail to provide sufficient and valid funds upon the conclusion of bidding may in the future be required to show their funds to the Public Trustee at future sales, to ensure valid bidding in the future. 16) Persons who are unable to show that they have sufficient funds to bid on a property will not be allowed to bid. 17) If the funds are valid and sufficient, the Public Trustee accepts the payment, strikes the property from the sale list, and announces it as sold to the high bidder. 18) Bidding continues with the next property for which there is a bidder. 19) When there are no more bidders (other than the lenders), the Public Trustee announces all remaining properties as sold to the lenders who submitted written bids as shown on the sale list. That concludes the sale. 20) After sale, there is usually an education Q&A session conducted by the Public Trustee. The Public Trustee cannot give legal advice. 21) All transactions at sale are separate – you cannot apply the pending “change” from one purchase towards the purchase of another property. 22) If a property is sold to a lender, the lender may within 8 business days request an administrative recission of the sale. 23) Except as noted just above, the Public Trustee cannot set aside a sale once it has been announced. Any request by a non-lender to undo a sale, or any request by a lender outside the 8 business day window, would need to be filed with the courts. 24) If the winning bidder provides more money to the Public Trustee than the amount of the final winning bid, the Public Trustee will issue a check for the balance after verifying that the funds have cleared. Upon the advice of our attorney, this will occur on the 4th business day following sale, or later if the check is written on a bank from outside our Federal Reserve region. The check will be mailed to the winning bidder unless the bidder asks, on the competitive bid information sheet, that it be held for pick-up. 25) In lieu of waiting for the refund check to be written, the winning bidder has the option of bringing the Public Trustee replacement funds of the same type described in policy #13 above. Such funds would replace one or more of the checks provided at sale, and should be received by noon on the day of sale. Shortly after noon, we will begin the process of entering and depositing the funds received, and no replacement funds will be accepted once that process begins. No prior notice need be given the Public Trustee by the investor choosing to exercise this option, and the Public Trustee will not hold up the deposit process in anticipation of receiving replacement funds. All funds provided at sale will remain in the Public Trustee’s custody until replacement funds are brought in, reviewed for validity, and accepted. 26) No third-party endorsed checks are accepted. This includes checks from the Public Trustee endorsed back to the Public Trustee.

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27) A lender may send a representative to participate in competitive bidding. This representative must be identified to us in writing prior to the sale. As long as there is a deficiency remaining on the property, the lender does not need to provide funds to the Public Trustee if it has the high bid. If the deficiency is exhausted, then a winning lender needs to provide funds in the same form as another bidder, in the amount exceeding the original bid and the deficiency.158 28) A lender may amend a sale bid after Tuesday at noon only by sending someone to the sale in person. Such amendments will be made at the same time as the continuances are announced. If the Public Trustee has required an amended bid, the sale will be continued if the bid is not amended by the start of sale.

PUBLIC TRUSTEE REQUEST FOR AGRICULTURAL STATUS INFORMATION

(Print on letterhead) Memo to: El Paso County Assessor Reference: Foreclosure Number ______ It is not evident from the legal description contained in the deed of trust being foreclosed whether or not the property described therein is considered agricultural for foreclosure purposes. The legal description of the property is: The property has a street address of: The grantor on the deed of trust being foreclosed is: The deed of trust was recorded on: Please verify if any of the following apply to this property, in accordance with C.R.S.-38-38-108, and return this document via interoffice mail or email. Yes No Any portion of the property lies within a recorded subdivision plat. Yes No Any portion of the property was located within the incorporated limits of a city of town at the time the deed of trust was recorded or is so located now. Yes No Any portion of the property was valued and assessed as other than agricultural property after the date of the recording of the deed of trust or as of this statement. Date of Assessor statement __________________________ ________________________________________________ Signature Courtesy: Thomas Mowle, El Paso County

INDORSEMENT OF REINSTATEMENT

The undersigned as ___________(Public Trustee) – (Sheriff)________ for the county of ________________, State of Colorado, by this indorsement, hereby confirms the reinstatement of this _____________(evidence of debt) – (deed of trust) – (lien)________________ in accordance with the requirements of section 38-38-109(2)(c)(I), Colorado Revised Statutes. Date ___________________________ __________________________________________________ Signature (Public Trustee or Sheriff) For the County of ____________________________

SAMPLE CONDUCT OF SALE SCRIPT

Announce your name and title at the start of the sale Please turn off your cell phone and refrain from visiting with others in the room during the sale. Today’s sale date is . ALL OF THE PROPERTIES FOR SALE TODAY ARE IN ADAMS COUNTY AND THEY HAVE BEEN ADVERTISED FOR 5 CONSECUTIVE WEEKS IN NEWSPAPERS WITHIN ADAMS COUNTY. We post a Pre-Sale list on Monday afternoon and another, more final version on Tuesday afternoon. We have additional copies of the Pre-Sale list at the front of the room for anyone that needs a copy. Anyone wishing to bid on any property on today’s list must have completed a Bidder information form when you arrived. If you are a successful bidder today, you MUST PROVIDE FUNDS, IN THE FORM OF A CASHIERS CHECK, TELLERS CHECK OR A WIRE TRANSFER THAT HAS BEEN CONFIRMED PRIOR TO SALE, IMMEDIATELY WHEN BIDDING ON THAT PROPERTY HAS CEASED. IF YOU HAVE INSUFFICIENT FUNDS, STALE DATED CHECK OR A THIRD PARTY CHECK, THE BID WILL BE VOIDED AND THE BIDDING PROCESS WILL START OVER ON THAT PROPERTY. WE CONSIDER ANY CHECK DATED MORE THAN THREE MONTHS AGO (which would be on or before ) TO BE STALE DATED UNLESS THE CHECK INDICATES A LONGER PERIOD OF TIME ON ITS FACE. If you are NOT the successful bidder of a property it is advised, that at the end of the bidding process, you wait until after verification of funds before leaving the sale room. If you leave prior to verification of funds, you may miss out on participating in the bid process if funds do not meet the stated requirements. If you are the successful bidder on a property you may proceed to the waiting room for a receipt after bidding has ceased on that property. Some of the sales listed on today’s list MAY HAVE BEEN CONTINUED FROM THE ORIGINAL SALE DATE to today’s date.

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THE LIENS BEING FORCLOSED MAY NOT BE A FIRST LIEN – YOU ARE EXPECTED TO EXERCISE DUE DILIGENCE BY RESEARCHING ANY LIENS ON THE PROPERTY PRIOR TO BIDDING AT SALE. THE PUBLIC TRUSTEE DOES NOT KNOW THE POSITION OF THE LIEN BEING FORECLOSED. IF YOU ARE THE SUCCESSFUL BIDDER ON A FORECLOSURE TODAY, TITLE DOES NOT VEST INTO YOUR NAME UNTIL EIGHT BUSINESS DAYS AFTER THE SALE, OR IF LIENOR INTENTS TO REDEEM ARE FILED, AT THE END OF ALL REDEMPTION PERIODS. YOU DO NOT HAVE A RIGHT TO ENTER THE PROPERTY IF IT IS OCCUPIED WITHOUT FIRST GOING THROUGH THE LEGAL PROCESS TO EVICT. At this time, I will go through the list and indicate any of the properties on it that will NOT be sold today due to last minute continuances and give you the date to which it has been continued to. (announce foreclosure number A2009 _, page number , continued date) BIDDING PROCESS: The opening bid at the sale must be for at least $1.00 over the amount of the lender's written bid. If another person is bidding on the same property, the second bid must be for an incremental amount no less than $1.00 more AND sufficient to bring the bid to a whole dollar amount (no penny amounts) Thereafter, bidding will proceed in increments of no less than $200.00 At this time we will begin the bidding process in numerical order by case number. (Give page number of each sale, read foreclosure number, grantor, street address or legal) ON BEHALF OF THE LENDER THE PUBLIC TRUSTEE SUBMITS AN OPENING BID IN THE AMOUNT OF _ARE THERE ANY OTHER BIDS? (after each bid has ceased, ask to see the funds. Then state the property located at , has been struck and sold to (NAME OF SUCCESSFUL BIDDER), for the amount of _. The remaining properties on today’s sale list are struck and sold to the bidders as posted and shown on the pre-sale list. Courtesy: Thomas Mowle, El Paso County

REDEEMING HOA LIENS

REDEEMING HOA LIENS (El Paso County Public Trustee policy on redeeming HOA liens) A Homeowners’ Association (HOA), or its assignee, has the right to redeem in the most-senior junior position to the first Deed of Trust if all of the following are true: A) The first Deed of Trust was recorded after the Declaration of Covenants for the HOA. B) Either the DoT or the Declaration of Covenants was recorded after 6/30/1992. C) There is a positive balance remaining after doing the following: i) Take the amount of unpaid assessments, fines, and (unless the declaration provides otherwise), charges, late charges, attorney fees, and interest, due through the end of the first redemption period. ii) Subtract an amount equal to the common expense assessments due (paid or unpaid) absent acceleration in the six months immediately prior to the recording of the NED. In order to meet the requirement of C.R.S. 38-38-302(1.f) with respect to “setting forth the amount required to redeem,” the El Paso County Public Trustee requires all of the following to be submitted with any intent to redeem on an HOA assessment: 1) A copy of the recorded Declaration of Covenants. This needs to be the original or a certified copy, unless a separate lien was recorded, in which case we would need the original or a certified copy of the lien along with an ordinary copy of the recorded Declaration of Covenants. 2) A notarized affidavit signed by an officer of the HOA that does the following: a) Links the recorded Declaration of Covenants to the property in the Deed of Trust in foreclosure. b) Provides the amount of unpaid assessments, fines, and (unless the declaration provides otherwise), charges, late charges, attorney fees, and interest, due through the end of the first redemption period, c) Sets forth the amount of common expense assessments due (paid or unpaid) absent acceleration in the six months immediately prior to the recording of the NED, and d) Optionally, subtracts “c” from “b” to produce the amount required to redeem. 3) A recorded assignment of lien, if applicable. Once we have those documents, and have verified that there is a positive balance remaining after subtracting the value of the super-priority lien, we can accept the Intent to Redeem, with a lien amount equal to the balance in C above. None of these documents need to be recorded other than the original Declaration of Covenants, and any assignment – the specific lien is automatically valid. The HOA lien is always in first position behind the first Deed of Trust, and is senior to any other Deeds of Trust.

NOTICE OF LIENOR INTENT TO REDEEM

Notice of Lienor Intent to Redeem Including Statement of Redemption Amount Public Trustee Foreclosure Sale No. ___________________ TO THE PUBLIC TRUSTEE OF COUNTY, STATE OF COLORADO Date of Public Trustee Sale ________________________________________

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Name of Junior Lienor Intending to Redeem ________________________________________ Type of Junior Lien ________________________________________ County of Recording ________________________________________ Recording Date ________________________________________ Recording Information (Reception Number) ________________________________________ The undersigned (“Junior Lienor”) is a Junior Lienor pursuant to CRS §38-38-100.3(12) and is entitled to redeem from the Public Trustee’s Sale described above pursuant to CRS §38-38-302. Junior Lienor’s lien (i) is a deed of trust or other lien created or recognized by state or federal statute or by judgment of a court of competent jurisdiction, (ii) is a junior lien as defined in CRS §38-38-100.3(11); and (iii) appears by instrument(s) duly recorded in the county named above. Junior Lienor is one of the persons who would be entitled to cure pursuant to CRS §38-38-104, regardless of whether such Lienor filed a notice of intent to cure. Junior Lienor is not a qualified holder pursuant to CRS §38-38-100.3(20). The original instrument (or a certified copy) evidencing Junior Lienor’s lien is attached. The original recorded assignment (or a certified copy) is also attached as required by 38-38-302(1)(e) OR Junior Lienor is a qualified holder pursuant to CRS §38-38-100.3(20). A copy of the instrument evidencing the Junior Lienor’s lien is attached. A copy of the recorded assignment is also attached as required by 38-38-302(1)(e) Junior Lienor is entitled to redeem under CRS §38-38-302(I) (c) because the instrument evidencing Junior Lienor’s lien, which was recorded in the incorrect county as described below prior to the date and time of the recording of the Notice of Election and Demand, was rerecorded in the correct county, as described above, at least fifteen calendar days prior to the actual date of sale. The recording information for the incorrect county is: Incorrect County of Recording of Junior Lien _________________________________________ Recording Date of Junior Lien _________________________________________ Recording Information (Reception Number) _________________________________________ Executed on: ______________________ Name of Junior Lienor _______________________________ By: _______________________________________________ (Signature) By: _______________________________________________ (Print Name)

STATEMENT OF REDEMPTION AMOUNT

STATEMENT OF REDEMPTION AMOUNT AS ATTACHED TO THE NOTICE OF LIENOR INTENT TO REDEEM PURSUANT TO CRS §38-38-302(I)(f) Public Trustee Foreclosure Sale No. _______________________ The amount required to redeem the Junior Lien through the nineteenth business day after the sale, is as follows: (Inapplicable items may be omitted) Amounts due under the Junior Lien: Principal $__________ Interest $__________ Late Charges $__________ Other amounts due under the evidence of debt under Junior Lien (specify) _____________________________ $__________ _____________________________ $__________ _____________________________ $__________ _____________________________ $__________ Category subtotal: $__________ Other fees and costs advanced by the Junior Lienor (specify) _____________________________ $__________ _____________________________ $__________ _____________________________ $__________ _____________________________ $__________ Category subtotal: $__________ Total due Junior Lienor $______________ $__________ Per Diem Interest @ _________ % per annum. The amount required to redeem the Junior Lien is zero. Junior Lienor is entitled to redeem under CRS §38-38-305 because the Junior Lienor is: Lessee of the property Holder of an easement encumbering the property. Executed on: ______________________________ Name of Junior Lienor ____________________________ By: (signature) ______________________________

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By: (print name) ______________________________ Title: ______________________________ Junior Lienor Address ____________________________________ ____________________________________ Junior Lienor Telephone ____________________________________ Junior Lienor Email ____________________________________ Junior Lienor Fax ____________________________________ State of Colorado ) ___________________ ) County of __________ ) The foregoing Statement of Redemption Amount was acknowledged before me on __________________________, by _____________________________, as ______________________________ of _________________________ the Junior Lienor. Witness by hand and official seal. ____________________________________ Notary Public My commission expires:_________________________ Affix Seal

REDEMPTION STATEMENT – CERTIFICATE OF PURCHASE HOLDER

REDEMPTION STATEMENT – CERTIFICATE OF PURCHASE HOLDER El Paso County Public Trustee File: ____________________ Please be advised that the following represents the total amount needed to redeem the above referenced foreclosure through the end of the first redemption period (19 business days after the date of sale): Amount of Purchase at Sale: $______________ Interest at ____% for 19 business days $______________ Per diem = $___________ SUBTOTAL: $______________ Other charges allowed under C.R.S. 38-38-301. All such charges must be accompanied by documentation describing the fees and costs including the date on which they were incurred, in a form that is compliant with C.R.S. 38-38-302(3)(a), unless the CoP holder is a qualified holder per C.R.S. 38-38-100.3(20). Any charges that are not allowable under the law, or that are not properly documented according to the law before the end of the 13th business day after sale, will be excluded. Property, general liability, and casualty insurance $______________ Property inspections $______________ Taxes and assessments $______________ Homeowner’s association assessment $______________ Amounts paid on prior liens $______________ Lease payments $______________ Attorney fees $______________ Court Ordered Costs and Expenses $______________ Costs allowed by C.R.S. 38-38-107(3)(b)(VI) $______________ Other (describe) $______________ SUBTOTAL: $______________ TOTAL due holder of the Certificate of Purchase through the end of the first redemption period: $______________ Dated: ______________________ Signature:_____________________________________ Name: _______________________________________ Title:_________________________________________ Holder:_______________________________________ Unless signed by the attorney for the holder, acknowledgement required: Subscribed and sworn to before me this ____ day of _____________, 20__, by _____________. Notary Public My commission expires: _______________

CERTIFICATE OF LIENOR

CERTIFICATE OF LIENOR El Paso County Public Trustee File: ____________________ Please be advised that the following represents the total amount needed to redeem the above referenced foreclosure through the end of the next redemption period (___ business days after the date of sale):

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Amount Paid to Redeem: $______________ Principal amount of Lien $______________ Interest through end of the 1st Redemption Period (19 business days after the date of sale) $______________ Add’l interest at ____% for ___ calendar days $______________ Per diem = $___________ SUBTOTAL: $______________ Other charges allowed under C.R.S. 38-38-301. All such charges must be accompanied by proof of payment per C.R.S. 38-38-302(3)(a) Property, general liability, and casualty insurance $______________ Property inspections $______________ Taxes and assessments $______________ Homeowner’s association assessment $______________ Amounts paid on prior liens $______________ Lease payments $______________ Attorney fees $______________ Court Ordered Costs and Expenses $______________ Costs allowed by C.R.S. 38-38-107(3)(b)(VI) $______________ Other (describe) $______________ SUBTOTAL: $______________ TOTAL due holder of the Certificate of Redemption through the end of the next redemption period: $______________ Dated: ______________________ Signature:_____________________________________ Name: _______________________________________ Title:_________________________________________ Holder:_______________________________________ Unless signed by the attorney for the holder, acknowledgement required: Subscribed and sworn to before me this ____ day of _____________, 20__, by _____________. _________________________________ Notary Public My commission expires: _______________

PUBLIC TRUSTEE'S CERTIFICATE OF PURCHASE

PUBLIC TRUSTEE’S CERTIFICATE OF PURCHASE (CRS §38-38-401) Public Trustee Foreclosure Sale No. I, the undersigned Public Trustee, certify that pursuant to the power and authority vested in me by law and by the Deed of Trust described as follows: Original Grantor(s) Original Beneficiary(ies) Current Holder of Evidence of Debt Date of Deed of Trust County of Recording Recording Date of Deed of Trust Recording Information (Reception and/or Book and Page) Original Principal Amount AND, upon Notice of Election and Demand being filed with me and recorded in said County as follows: Date Reception # Book # Page # Pursuant to §38-38-103, I first mailed a Combined Notice to the original grantor(s) of said Deed of Trust and to any persons required to be notified by CRS §38-38-100.3, §38-38-103, and §38-38-305. I further published the Combined Notice, in , a newspaper of general circulation in said County as prescribed by law. AND, on , I exposed to public sale the property situate in the aforesaid County of Insert Name of County, State of Colorado, described as follows: Also known by street and number as: THE PROPERTY DESCRIBED HEREIN IS ALL A PORTION OF THE PROPERTY CURRENTLY ENCUMBERED BY THE LIEN OF THE DEED OF TRUST. If applicable, a description of any changes to the deed of trust described in the notice of election and demand pursuant to affidavit as allowed by statutes:

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At said sale , hereinafter “Purchaser”, Whose legal address is bid the sum of $ for said property. Being the highest and best bid received therefor, the said property was struck off and sold to the said Purchaser. Unless a redemption is made, the said Purchaser or assignee of the Certificate of Purchase shall be entitled to a confirmation deed for said property at the end of all redemption periods allowed by law to all subsequent lienors, and other persons entitled to redeem. If Checked. The bid submitted by the holder of the evidence of debt was a deficiency bid. The amount of the deficiency as a result of the successful bid at sale is $ . A copy of the executed Order Authorizing Sale and the Mailing List(s) submitted to the Public Trustee for this foreclosure are attached to and made a part of this Certificate of Purchase. The public trustee shall retain the recorded certificate of purchase in the public trustee’s records. Executed on: Insert Name of Public Trustee Affix Seal _____________________________________________________________ Public Trustee in and for the City and County County of , State of Colorado By:________________________________ Deputy Public Trustee When Recorded Return to: Public Trustee

CERTIFICATE OF REDEMPTION

CERTIFICATE OF REDEMPTION (CRS § 38-38-402) Public Trustee Foreclosure Sale No. Notice is hereby given that the Public Trustee is in receipt of Redemption money paid under C.R.S. 38-38-402: Redeeming Party(ies) Redeeming Party’s(ies’)Address Redemption Amount Paid Foreclosure Sale Date Original Grantor Date of Deed of Trust County of Recording Recording Date of Deed of Trust Recording Information (Reception and/or Book and Page) The property being redeemed is described as follows: Also known by street and number as: THE PROPERTY DESCRIBED HEREIN IS ALL A PORTION OF THE PROPERTY CURRENTLY ENCUMBERED BY THE LIEN OF THE DEED OF TRUST. If applicable, a description of any changes to the deed of trust described in the notice of election and demand pursuant to affidavit as allowed by statutes: The public trustee shall retain the recorded certificate of redemption in the public trustee’s records. Executed on: Insert Name of Public Trustee Affix Seal _____________________________________________________________ Public Trustee in and for the City and County County of , State of Colorado By:________________________________ Deputy Public Trustee When Recorded Return to: Public Trustee

CONFIRMATION DEED

CONFIRMATION DEED (CRS §38-38-502) Public Trustee Foreclosure Sale No. THIS DEED is made Insert Date, between Name of Public Trustee as the Public Trustee in and for the City and County County of , State of Colorado, grantor and Name of holder of the COP or COR , grantee, the holder of the certificate of purchase holder of the certificate of redemption issued to the lienor last redeeming, whose legal address is Insert Legal Address.

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WHEREAS, the Grantor(s) described below did convey to the public trustee, in trust, the property hereinafter described to secure the payment of the indebtedness provided in said deed of trust: Original Grantor(s) Original Beneficiary(ies) Current Holder of Evidence of Debt Date of Deed of Trust County of Recording Recording Date of Deed of Trust Recording Information (Reception and/or Book and Page) Insert Recording Information WHEREAS, a violation was made in certain of the terms and covenants of said deed of trust as shown by the notice of election and demand for sale filed with the Public Trustee; the said property was advertised for public sale at the place and in the manner provided by law and by said deed of trust; combined notice of sale and right to cure and redeem was given as required by law; said property was sold according to said combined notice; and a certificate of purchase thereof was made and recorded in the office of said county Clerk and Recorder; and WHEREAS, all periods of redemption have expired. NOW, THEREFORE, the Public Trustee, pursuant to the power and authority vested by law and by the said deed of trust, confirms the foreclosure sale and sells and conveys to grantee the following described property located in the City and County County of Name of County, State of Colorado, to wit: Insert Legal Description Also known by street and number as: Insert Street Address THE PROPERTY DESCRIBED HEREIN IS ALL A PORTION OF THE PROPERTY CURRENTLY ENCUMBERED BY THE LIEN OF THE DEED OF TRUST. If applicable, a description of any changes to the deed of trust described in the notice of election and demand pursuant to affidavit as allowed by statutes: Insert Scrivener’s error verbiage To have and to hold the same, with all appurtenances, forever. Executed on: Insert Name of Public Trustee Affix Seal Here Public Trustee in and for the City and County County of Name of County, State of Colorado By: ____________________________________________________________ Insert name and title of signer When Recorded Return to: Insert Name of County Public Trustee

AFFIRMATION OF LEASE

[Letterhead] ______________ ___, 20__ El Paso County Public Trustee 105 E. Vermijo Ave., Suite 101 Colorado Springs, Colorado 80903 ATTN: Thomas S. Mowle Re: [CURRENT OWNER OF DEBT] Foreclosure against [BORROWER NAME]; PT Foreclosure No. __________________ Dear Public Trustee Thomas S. Mowle: Section 38-38-506(3) provides that “If an interested person files with the officer at any time a document affirming an omitted party’s interest in the property, subject to the terms, conditions, and provisions of the recorded instrument from which such omitted party’s interest is derived, or in the case of an omitted party that is a lessee, subject to the terms and conditions of the lease, whether written or oral, the interest of such omitted party in the property shall not be affected by the foreclosure, and such omitted party shall have no right to cure or redeem.” None of the tenants of the building located on the property being foreclosed have been named in the pending foreclosure and all such tenants are deemed “omitted parties” for purpose of this notice letter. On behalf of the foreclosing lender referenced above, this letter confirms and affirms that the possessory rights of all such tenants under current leases are not to be affected by the pending foreclosure and such leases shall remain in place. Nothing herein is intended to modify or otherwise affect any Subordination, Non-Disturbance and Attornment Agreement between any such tenant and the lender or any other agreement addressing the rights of the tenant and the lender or any successor to the property resulting from the foreclosure of the property. If you have any questions, please do not hesitate to call me directly at (___) ___-____. [Company Name] By: ___________________________________________ [Attorney Name, Attorney No.]

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[Address] [Address] Telephone: (___) ___-____ Attorneys for [CURRENT OWNER OF DEBT]

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