What to Do If Your Home Is in Foreclosure

A foreclosure is when someone you owe money to tries to sell your home to pay the debt. Most foreclosures happen because a homeowner is behind on their mortgage payments. But foreclosures can happen for other reasons too. 

This guide explains the foreclosure process when a homeowner is behind on their mortgage payments. 

Who is involved in a foreclosure? 

There are several different people involved in a foreclosure. Here is a list of the people in a typical foreclosure:

Homeowner: The homeowner is the person facing foreclosure because they are behind on their mortgage payments. 

Lender: The lender is the person or company that is trying to foreclose to get back the money it loaned to the homeowner. Sometimes the lender is a bank. Sometimes it is a company that is hired to manage the loan and collect payments, also called a “mortgage servicer.”

Lender’s Attorney(s): Most lenders hire attorneys to represent them in the foreclosure. If your house is in foreclosure, you will probably get letters and legal notices from the lender’s attorney. 

Public Trustee: The Public Trustee is a county official who manages the foreclosure process. Every county in Colorado has its own Public Trustee. You can find your Public Trustee by visiting your county government’s website.

Court: The court plays a limited but important role in foreclosures. Lenders must get permission from a judge before a home can be sold at a foreclosure sale.  

I am behind on my mortgage. When can the lender start a foreclosure? 

For most mortgages, the lender cannot start a foreclosure until the mortgage is over 120 days past due. This means if you are over 4 months behind on your mortgage payments, the lender might be able to file a foreclosure. 

What should I do if I am behind on my mortgage payments?

Start by contacting your lender. Your lender might be able to give you time to catch up. They also might be able to offer you other ways to catch up, like changing your loan terms. 

The lender might ask you to fill out forms and send documents. You should do this. Make sure you fill out the forms completely and send the lender all the documents it requests. Keep copies of everything you send to the lender.

How will I know if my home is in a public trustee foreclosure?

You will receive paperwork from the Public Trustee. You will also probably get letters from the lender’s attorney. The paperwork will tell you the foreclosure sale date and give you information about your rights. You should act right away if you get a foreclosure notice.

The lender or servicer can continue the foreclosure sale but you won’t be mailed notice of the new sale date. You have to contact the Public Trustee to find out the actual sale date. Each county has its own system and may have information on the county website.

Does the lender need court permission to foreclose? 

The lender must get the court’s permission before a foreclosure sale can happen. If your home is in foreclosure, you will probably get court papers from the lender’s attorney. The court papers will be called a “Motion for an Order Authorizing a Foreclosure Sale” or a “Rule 120 Motion.” The papers will include a deadline for you to file a written response with the court.  These papers can be served by mail to your last known address and by posting (taping) to the door of your home.

What do I do if I get court papers on my foreclosure?

Never ignore court papers. You can file a written response listing your defenses. When deciding a Rule 120 Motion, the judge is only allowed to consider: 

• If you are behind on the mortgage. 
• If you are protected by the Servicemembers Civil Relief Act, which is a law that protects people on active-duty military service from foreclosure, including for 12 months after leaving active duty.
• If the lender has standing. “Standing” can be an issue when a mortgage company has assigned or sold the mortgage to another mortgage company, but the homeowner is not sure if this has happened and who owns the mortgage.
• If the lender properly reviewed your application for mortgage help. This defense only works if you sent a complete application for mortgage assistance at least 37 days before the scheduled foreclosure sale. 

Responding to a Rule 120 Motion can be complicated. You should get help from an attorney if possible. 

If you do not file a response, the court will allow the lender to continue with the foreclosure process. But there are still ways to prevent the foreclosure sale. 

How do I stop the foreclosure?

You can stop the foreclosure by bringing your mortgage current. To do this, you must file a document called a “Notice of Intent to Cure” with the Public Trustee. Contact your county Public Trustee to get the form you need to file.

The Notice of Intent to Cure must be filed at least 15 calendar days before the foreclosure sale date. If you file the notice late, you lose your right to prevent the foreclosure by bringing the mortgage current. 

After you file the Notice of Intent to Cure, the Public Trustee will tell you how much you need to pay to bring the mortgage current. If you pay that amount to the Public Trustee before noon on the day before the foreclosure sale, the Public Trustee will stop the foreclosure. 

Can I file for bankruptcy to stop a foreclosure?

Filing bankruptcy can delay or stop a foreclosure. The bankruptcy must be filed before the foreclosure sale occurs to stop a foreclosure. 

The most common type of bankruptcy to address a foreclosure is called a Chapter 13 bankruptcy. In a Chapter 13 bankruptcy, you repay your debts over 3-5 years. You must have a regular income to file a Chapter 13 bankruptcy. 

In a Chapter 13, you may be able to keep your home if you can repay the overdue mortgage payments over 3-5 years. You would also need to resume making your regular mortgage payment and pay your other living expenses. If you have non-exempt equity, you have to pay at least the amount of non-exempt equity to creditors during a Chapter 13 bankruptcy. 

If you are behind on your mortgage payments, a Chapter 7 will probably not help you save your home. You must be current in payments to keep your secured property in a Chapter 7 bankruptcy. 

If you have non-exempt equity (more than $250,000 or $350,000 if you are elderly or disabled), you could lose your home in a Chapter 7 bankruptcy. In a Chapter 7, creditors must be paid the amount of non-exempt property and the home could be ordered sold if there is non-exempt equity. 

Bankruptcies are complicated and have serious legal consequences. If you are considering bankruptcy, consult with a bankruptcy attorney. 

What are some practical tips for dealing with a foreclosure? 

• Communicate with your lender early and often
• Open and read your mail right away
• Keep copies of everything you send and receive 
• Ask for help from a HUD-certified housing counselor when you first start having issues paying
• Write down any deadlines, especially the foreclosure sale date and the deadline to respond to a Motion for an Order Authorizing a Foreclosure Sale 
• File a Notice of Intent to Cure at least 15 days before the foreclosure sale date
• Beware of scams and misinformation
• Do not sign the title over to anyone without getting legal advice. If you sign over title, you may be responsible for the loan, but you will lose any ownership interest
• Get help–contact a housing counselor and/or attorney 

Need more help?

If you are low-income, a senior, or a veteran, you may qualify for free legal help from Colorado Legal Services (CLS). To apply or ask if you might qualify, go to the CLS website and find the office that serves your area. If you call or visit, CLS can help you in your native language.

You can get help from the courts. Every judicial district has staff called “Sherlocks” to help people with their legal questions. To find the Sherlock in your county, visit the Judicial Department’s Sherlock webpage.