Gaschler Law Firm LLC

DELINQUENCY:  The day after a payment is due, a loan is technically delinquent.  If your grace period runs until the 15th of the month, and you pay on the 20th, your loan was delinquent.

DEFAULT:  If your payment has been due and unpaid for more than 30 days, the loan is in default.  Most mortgage servicers have special departments who handle loans that are in default.  The default department will monitor the loan and try to get the homeowner to pay the past-due payments in order to bring the loan current.  Some mortgage companies consider any defaulted loan to be in "pre-foreclosure."  This is not a formal process, but an internal determination made at the mortgage company.  If the loan continues to be in default, the servicer may decide to refer the loan to an attorney to start foreclosure proceedings.  Because foreclosure is expensive, most mortgage servicers will not start a foreclosure until at least three payments are past due.  HOWEVER, a loan can be referred for foreclosure as soon as default occurs!

FORECLOSURE:  Foreclosure is the formal process the mortgage company must go through to take back title to a home.  In Colorado, all foreclosures are "non-judicial" procedures, meaning, a "power of sale" is given to a county official called the Public Trustee.  To start a foreclosure, the lender files a Notice of Election and Demand (NED) with the Public Trustee requesting the Trustee conduct a public sale of the property.   Notice of the pending foreclosure action are sent to each borrower, to the home, and published in local newspapers.  This notice is called the Notice of Rights to Cure and Redeem (NOR).  Before the sale, the Public Trustee must seek court approval. This is called a Rule 120 Hearing.  From the initial filing of the NED, homeowners have a "Cure Period," to get the mortgage caught up and avoid foreclosure.  This cure amount will include any costs and fees the mortgage servicer has incurred in starting the foreclosure.  The cure period lasts between 110-125 from the date of the initial foreclosure filing.

PUBLIC TRUSTEE SALE:  The Public Trustee Sale or Foreclosure Sale is the date the property is actually auctioned off to the highest bidder.   Generally, the mortgage company will be the successful buyer at the sale.

EVICTION:  Once the property has been sold and the title has transferred to the new buyer, the homeowner is no longer allowed to possess the property.  The formal eviction process can begin within days of the foreclosure sale.