Colorado Foreclosure Defense – Reality Check
December 20, 2012 Leave a comment
Every week I communicate by phone and email with several Colorado property owners who want to understand and explore their rights and remedies. Some are already facing foreclosure or eviction, some are seeking to understand whether their mortgage is subject to challenge, and some have already instituted pro se actions. Most are in the midst of the modification quagmire and just trying to get a payment they can afford, with little action or success. Too many clients have spent thousands of dollars on mortgage related services and “audits” that produce nothing of value for purposes of saving the home.
There is a lot of information out there on the web regarding foreclosures, securitization, assignments, robo-signing, “produce the note,” quiet title, and the like. Does any of this apply to you in Colorado? Maybe, maybe not.
The analysis of a mortgage transaction and efforts to enforce the terms of the promissory note and deed of trust may be complex. A “securitization audit” of the loan may indicate reveal critical evidence, or it may simply reveal the Pooling and Service Agreement and Trust that owns your loan. Does this automatically mean that the party foreclosing is not the real party in interest? No. We must determine a) whether the party foreclosing is a “qualified holder of the evidence of debt,” and b) whether the foreclosing party actually holds the original evidence of debt or is otherwise authorized to foreclose. A securitization audit may be a tool to uncover potential evidence, and that evidence must be applied to the individual circumstances of the case. In Colorado, “produce the note” is not a defense as to the bank. This is because the bank, as a qualified holder of the evidence of debt, may institute the foreclosure based simply on a copy of the promissory note.
It remains to be seen whether the bank’s lack of possession of the original note may be a basis for contesting standing to foreclosure. Recent court decisions indicate that this approach won’t work unless there is strong proof that a third-party actually holds the note, or the bank has failed to file the Statement of Attorney for Qualified Holder of the Evidence of Debt with the Public Trustee. The case of In Re Miller, 666 F.3d 1255 (10th Circuit 2012) is particularly instructive.
If the party foreclosing is not a “qualified holder of the evidence of debt,” the door is open to challenge assignments of the note. In nearly all cases, the foreclosing party claims that it is a qualified holder. If they are entitled to foreclose and sell the collateral (your home), more investigation is required. Have the notice requirements of C.R.S. 38-38-101 been met? Has proper notice of the Rule 120 Hearing been met? Has the servicer waived the default by acceptance of payments after default? Do you have a HAMP Trial Plan Payment Agreement that may be enforced? These and many more questions must be answered based on the evidence of your case alone.
Does this mean that you should cave in and move? No. You need to explore all of the options – HAMP modification, HAFA foreclosure alternatives, short sale, sell the property yourself if you have equity. If you have genuine issues regarding the loan or foreclosure, litigation may be appropriate.
Don’t be misled by the ramblings of internet websites that profess to delivery foolproof strategies.
Mark Wm. Hofgard, Esq. is an Arizona and Colorado attorney focusing on real estate, mortgage, and foreclosure matters ****THIS BLOG IS COMPRISED OF HIS OPINIONS, OBSERVATIONS AND INTERPRETATIONS AND IS NOT INTENDED TO BE CONSTRUED AS LEGAL ADVICE. PLEASE CONSULT WITH AN ATTORNEY BEFORE RELYING ON OR TAKING ANY ACTION BASED ON THE INFORMATION IN THIS BLOG.****
Contact Mark at: Mark@markhofgardlaw.com