Colorado and Arizona Foreclosure Defense – GET YOUR MODIFICATION IN WRITING!
August 10, 2012 Leave a comment
I recently conducted a Colorado District Court hearing on a contested CRCP 120 matter. The court ruled in my client’s favor, and denied the bank’s motion for an Order Authorizing Sale. The court found that the doctrine of estoppel prevented the bank from claiming that a default occurred. Thus, the bank is prevented from exercising a power of sale in the deed of trust, and cannot foreclose.
The case underscores the importance of having a written agreement with the bank or servicer regarding modification. Here, the client had entered into a “Repayment Agreement” that specifically modified the terms of the promissory note. The servicer was to accept reduced payments for a period of time, and then provide the “best option” for resolving any remaining delinquency. After the reduced payments were made, the client sought to make the regular payments under the Note. These were returned by the servicer without providing any option whatsoever for resolving any delinquency.
The court found that the servicer’s letter was an agreement, and that it was estopped from asserting a default pursuant to Goodwin v District Court (Colorado Supreme Court, 1989). The client did everything in their power to follow the rules, and had a writing that met the requirements of Colorado’s Credit Statute of Frauds (C.R.S. § 13-10-124).
There is still an open issue in many of our other cases as to the bank/servicer’s liability where it clearly misled the borrower as to a) time to sale, b) date within which a cure could be effected, and c) amount of cure. If you have writings, emails, and letters from the servicer/bank, your case will be stronger.