Foreclosure of Deeds of Trust and Mortgages: 1990 Statutory Amendments-part Ii
| Publication year | 1990 |
| Pages | 1843 |
1990, September, Pg. 1843. Foreclosure of Deeds of Trust and Mortgages: 1990 Statutory Amendments-Part II
This article deals with the major provisions of Senate Bill ("S.B.") 109, which will become effective on October 1, 1990, and which make extensive changes in the Colorado public trustee foreclosure statutes. Part I was published in the August issue of The Colorado Lawyer at page 1601. It covered CRS §§ 38-37-104 through 38-38-107 and contained Appendix charts comparing the new statutory references with the old statutory numbers, and vice versa.
This Part II covers CRS §§ 38-38-108 through 38-39-105. It also discusses the applicability of S.B. 109's effective date.
The only substantive change to this section, which was formerly CRS § 38-39-117, was to provide in subsection (2) for an exception to the public trustee's setting of a sale date of not less than forty-five days or more than sixty days from the recording of the notice of election and demand (date of commencement of the foreclosure; see new § 38-38-101(3), discussed in Part I of this article). The exception arises in the event of the postponement of the originally scheduled sale date due to an erroneous publication and subsequent republication, as provided for and discussed under new CRS § 38-38-101(7)(b).
CRS § 38-38-109(1) is primarily a recodification of old CRS § 38-39-115(1), except for the last sentence of new subsection (1). This provides exceptions to the requirement that no sale can be held later than six months from the originally scheduled sale date. The two exceptions, as provided in subsection (4), are:
(1) where a bankruptcy is filed or an injunction enters which stays the foreclosure sale beyond the sixmonth limitation and
(2) where a sale is continued by an office conducting the sale as a result of not receiving written cure figures at least forty-eight hours before the scheduled sale date pursuant to new CRS § 38-38-104(2), discussed in Part I.
CRS § 38-38-109(2)(a) is entirely new. It addresses a situation where an injunction is entered or a bankruptcy petition has been filed staying the foreclosure after all publications of the notice of sale have been completed. Thereafter, the sale must be continued by the public trustee or sheriff for one week or for a longer period as requested by the foreclosing party, not to exceed one month. As long as the injunction or automatic bankruptcy stay remains in effect, the continued foreclosure date must be further continued as previously described.
Subsection (2)(b) also is new. It provides that in the event a foreclosure sale is held in violation of an automatic stay pursuant to a bankruptcy filing, with a subsequent order by the bankruptcy court dismissing the bankruptcy case, the original evidence of debt and the deed of trust, mortgage or other lien immediately must be deemed reinstated and the power of sale provided in the deed of trust deemed revived. The reinstatement will be confirmed by the endorsement of the officer conducting the sale, although failure of the officer to make the endorsement will not affect the validity of the reinstatement.
Subsection (2)(c) applies where the owner of an evidence of debt secured by a lien which has been reinstated under
subsection (2)(b) notifies the officer of the dismissal of the bankruptcy case within sixty days of the date on which the property is no longer subject to the automatic stay. In such a case, the officer must set a new foreclosure sale date of not less than twenty-four days or more than thirty-nine days from the date the officer receives the notice. Within ten days of receiving the notice, the officer must mail a notice of the rescheduled foreclosure sale to each person who was entitled to notice of the original foreclosure sale. The office also must republish a notice of the sale one time only.
Subsection (3) of new § 38-38-109 addresses a situation where an injunction or automatic stay as the result of a bankruptcy filing was entered prior to the completion of all publications of the notice of sale. In this event, the officer conducting the sale must immediately cancel any remaining publications of the notice of sale and, on the date fixed for the foreclosure sale, announce that the sale has been enjoined or stayed by the automatic stay provisions...
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