STANDING – REAL PARTY IN INTEREST
1. The promissory outlines the terms of repayment of your loan. It also talks about what will happen if you don't make your monthly payments on time. The remedy in the promissory note for not making your payments on time is to accelerate the loan, which basically means declaring the entire amount of your loan due. But Colorado law does not permit a lender to foreclose on a promissory note by itself. The lender must sue you and obtain a judgment, levy the judgment against your home and then initiate the foreclosure process.
2. Obviously, this would be a much longer process which is precisely why lenders choose the option of foreclosing the deed of trust through the public trustee. IF THE HOMEOWNER IS GOING TO BE HELD TO THE LETTER OF THE LAW, THEN THE LENDERS SHOULD BE HELD TO THE EXACT SAME STANDARD, OTHERWISE, THE JUDGES ARE THEMSELVES BREAKING THE LAW!!!!
3. The deed of trust, legally speaking, is an instrument that affects title to real estate as defined in the recording statute under C.R.S. §38-35-109(1) and if the foreclosing lender is not the original lender on the deed of trust, then the foreclosing lender must be made the lender by executing an “Assignment of Deed of Trust” and then recorded it under the recording statute....OR.....as explained earlier, must possess the original promissory note.
4. Implicit in Rule 120 is the requirement that the bank seeking an order of sale have a valid interest in your property that is covered under the terms of the deed of trust; that is, the power of sale provision in the deed of trust that allows for the sale of your home for that particular bank through the public trustee if you default on your loan.
5. Unless the “real party in interest” defense is considered at a Rule 120 hearing, any order for sale might well result in the sale of property in favor of a party who has no legitimate claim to the property at all. Once a debtor in a Rule 120 proceeding raises the “real party in interest” defense, therefore, the burden should devolve upon the party seeking the order of sale to show that he or she is indeed the real party in interest.
IF A LENDER INITIATES A FORECLOSURE ON YOUR HOME AND THEY ARE NOT THE PARTY ON THE DEED OF TRUST OR THEY HAVE NOT BEEN LAWFULLY ASSIGNED THE RIGHTS UNDER THE DEED OF TRUST, YOUR FORECLOSURE IS ILLEGAL FROM THE START, PLAIN AND SIMPLE!! Got it!!
6. Without question, the scope of this hearing also allows for you to argue that the foreclosing lender has no right to foreclose if it is not the lender on the deed of trust and has not been lawfully assigned the rights under the deed of trust.....OR....is not in possession of the original promissory note. This is a “standing issue”; an issue of legal standing, whether the bank is the “real party in interest” to bring the foreclosure lawsuit in the first place. Here, the Colorado Supreme Court again states:
Although the purpose of Rule 120 was originally intended to protect members of the military service from prejudice resulting from foreclosure proceedings commenced against them during their period of military service, see 50 U.S.C.A. app. § 532 (1981), the scope of the rule has been extended by case law to provide due process protections with respect to the taking and public sale of a real property interest of a debtor under a deed of trust. Goodwin v. District Court, 779 P.2d 837, 842 (Colo. 1989)
“We thus conclude that the scope of inquiry in a Rule 120 proceeding encompasses an inquiry into whether the moving parties are the real parties in interest by virtue of their right to enforce the power of sale contained in the instrument on which the Rule 120 proceeding is based, and that the district court erred in refusing to consider the "real party in interest" defense raised by the Goodwins.” Goodwin v. District Court, 779 P.2d 837, 842 (Colo. 1989)
7. Even though it is a lawful requirement of the judge to verify that the lender asking for an order to sell your home is the correct lender, you cannot rely on this to be done. IMAGINE THIS: Back in 2005, the only two magistrates judges responsible for hearing all of the foreclosure cases in Denver County, Magistrate Diana Dupree and Magistrate Elizabeth Leith, paid by our tax dollars no less, were both relieved of their foreclosure duties in June of that year because they weren't doing any verifications, were denying hearings to people that were contesting their foreclosure and just simply rubber-stamping and approving foreclosures whether lawful or not. THIS IS OUTRAGEOUS CONDUCT BY A COURT OFFICIAL (magistrate, judge or otherwise)!! NEEDLESS TO SAY, WE STILL HAVE JUDGES SITTING ON THE BENCH EITHER PARTICIPATING IN THE WRONGS OR TURNING A BLIND EYE AND DEAF EAR TO YOUR PROPERTY RIGHTS!!
8. Demand your hearing!!
9. Even though the law provides other opportunities for you to contest the validity of your foreclosure, it is extremely important that you demand your right to be heard at the Rule 120 hearing and raise all of the relevant issues at this hearing. As stated earlier, the law requires that you be notified of the date and time of the hearing. The law also requires that after you receive your notice, you file a response letting the court know that you want your hearing and that you have relevant issues to bring up. Your response does not have to be in any particular legal form, but we have provided one for you on this site ("file your response"). There is also a $158.00 fee that must be paid at the time you file your response and your response must be filed no later than 7 days prior to the date and time set for the hearing. (If your hearing date is set for August 22nd.....file your response with the court no later than August 15th !)
10. Order From the Court. Although the Public Trustee sets the sale date, as stated earlier, the Public Trustee cannot proceed with the sale of your home without an order from the court first. The actual sale must be scheduled at least seven days after your foreclosure hearing. The attorneys, the lenders, the Public Trustee and the courts will often ignore this seven day provision, as well as other laws, even though the Colorado Supreme Court made this requirement crystal clear.
“Because the debtors' due process rights and statutory right to cure are at stake, we find it imperative to apply the statutes in a manner which effectuates the right to cure and also gives meaning to the due process right to a hearing. These objectives are satisfied by imposing the requirement that the foreclosure sale be held more than seven days after the Rule 120 hearing in a case. The rule is made absolute.” Kirchner v. Sanchez, 661 P.2d 1161 (Colo. 1983).
11. A foreclosure sale that does not comply with this requirement is unlawful and therefore invalid. But you, the homeowner, must raise this issue in court and fight to have this provision enforced.
FORECLOSURE SALE
12. Right to Cure. At least fifteen calendar days prior to the date the foreclosure sale is to be held, you must submit to the Public Trustee a notice of intent to cure (this means that you will pay all of the past due months to bring your loan current). The right to cure is a statutory right and even if you don’t know for sure that you will have the money to cure, it is still a very good idea to file your notice. This forms is available at the Public Trustee’s office. This notice simply means that you intend to bring your loan current prior to the actual sale of your property by the Public Trustee. If you are fortunate enough to raise the money to bring your loan current before the sale takes place, the foreclosure will terminate and you will continue to make your scheduled monthly payments as before.
13. Certificate of Purchase. Once your property goes to sale, the public trustee must issue a Certificate of Purchase to the person or entity that purchased your property at the trustee sale. The Certificate of Purchase is then recorded in the public records....Clerk and Recorders Office of the county where the property is located.
14. Even though the homeowners have no redemption rights, junior lien holders do. Once all redemption rights have expired, the public trustee will then issue a Public Trustee's Confirmation Deed.
15. Public Trustee’s Confirmation Deed. The public trustee’s deed, when issued, conveys the property out of your name and back into the lender’s name (or the investor who may have bought your home at the foreclosure sale). Let me re-emphasize that if the foreclosure is not lawfully conducted, the public trustee’s confirmation deed is a void instrument. All statutory requirements must be met before validity can be given to the public trustee's confirmation deed.
C.R.S. §38-38-504 states: “Any deed executed by an officer or other official under this article shall be prima facie evidence of compliance with all statutory requirements for the sale and execution of the deed and evidence of the truth of the recitals contained in the deed.”
16. AGAIN.....all statutory requirements must be followed, otherwise, your foreclosure is not valid and the title to your home must remain in your name! The Colorado Supreme Court, holds that the provisions of the deed of trust and statutes relating to the proceedings for the public trustee foreclosure, must be strictly followed. This is because, this method of foreclosure is one which cuts out the interests of the owner and conveys title to another private party at the hands of a public official (presumably, an unbiased public official). So if the foreclosure is not done right, ITS NOT DONE!! That’s the law.
17. And finally as we discussed earlier, pursuant to Colorado law, a void instrument cannot convey title.
“Void deeds do not convey title, and are wholly ineffective to interrupt one's right to possession of property therein described.” Concord Corporation v. Huff 144 Colo. 72, 355 P.2d 73 (1960).
1. The promissory outlines the terms of repayment of your loan. It also talks about what will happen if you don't make your monthly payments on time. The remedy in the promissory note for not making your payments on time is to accelerate the loan, which basically means declaring the entire amount of your loan due. But Colorado law does not permit a lender to foreclose on a promissory note by itself. The lender must sue you and obtain a judgment, levy the judgment against your home and then initiate the foreclosure process.
2. Obviously, this would be a much longer process which is precisely why lenders choose the option of foreclosing the deed of trust through the public trustee. IF THE HOMEOWNER IS GOING TO BE HELD TO THE LETTER OF THE LAW, THEN THE LENDERS SHOULD BE HELD TO THE EXACT SAME STANDARD, OTHERWISE, THE JUDGES ARE THEMSELVES BREAKING THE LAW!!!!
3. The deed of trust, legally speaking, is an instrument that affects title to real estate as defined in the recording statute under C.R.S. §38-35-109(1) and if the foreclosing lender is not the original lender on the deed of trust, then the foreclosing lender must be made the lender by executing an “Assignment of Deed of Trust” and then recorded it under the recording statute....OR.....as explained earlier, must possess the original promissory note.
4. Implicit in Rule 120 is the requirement that the bank seeking an order of sale have a valid interest in your property that is covered under the terms of the deed of trust; that is, the power of sale provision in the deed of trust that allows for the sale of your home for that particular bank through the public trustee if you default on your loan.
5. Unless the “real party in interest” defense is considered at a Rule 120 hearing, any order for sale might well result in the sale of property in favor of a party who has no legitimate claim to the property at all. Once a debtor in a Rule 120 proceeding raises the “real party in interest” defense, therefore, the burden should devolve upon the party seeking the order of sale to show that he or she is indeed the real party in interest.
IF A LENDER INITIATES A FORECLOSURE ON YOUR HOME AND THEY ARE NOT THE PARTY ON THE DEED OF TRUST OR THEY HAVE NOT BEEN LAWFULLY ASSIGNED THE RIGHTS UNDER THE DEED OF TRUST, YOUR FORECLOSURE IS ILLEGAL FROM THE START, PLAIN AND SIMPLE!! Got it!!
6. Without question, the scope of this hearing also allows for you to argue that the foreclosing lender has no right to foreclose if it is not the lender on the deed of trust and has not been lawfully assigned the rights under the deed of trust.....OR....is not in possession of the original promissory note. This is a “standing issue”; an issue of legal standing, whether the bank is the “real party in interest” to bring the foreclosure lawsuit in the first place. Here, the Colorado Supreme Court again states:
Although the purpose of Rule 120 was originally intended to protect members of the military service from prejudice resulting from foreclosure proceedings commenced against them during their period of military service, see 50 U.S.C.A. app. § 532 (1981), the scope of the rule has been extended by case law to provide due process protections with respect to the taking and public sale of a real property interest of a debtor under a deed of trust. Goodwin v. District Court, 779 P.2d 837, 842 (Colo. 1989)
“We thus conclude that the scope of inquiry in a Rule 120 proceeding encompasses an inquiry into whether the moving parties are the real parties in interest by virtue of their right to enforce the power of sale contained in the instrument on which the Rule 120 proceeding is based, and that the district court erred in refusing to consider the "real party in interest" defense raised by the Goodwins.” Goodwin v. District Court, 779 P.2d 837, 842 (Colo. 1989)
7. Even though it is a lawful requirement of the judge to verify that the lender asking for an order to sell your home is the correct lender, you cannot rely on this to be done. IMAGINE THIS: Back in 2005, the only two magistrates judges responsible for hearing all of the foreclosure cases in Denver County, Magistrate Diana Dupree and Magistrate Elizabeth Leith, paid by our tax dollars no less, were both relieved of their foreclosure duties in June of that year because they weren't doing any verifications, were denying hearings to people that were contesting their foreclosure and just simply rubber-stamping and approving foreclosures whether lawful or not. THIS IS OUTRAGEOUS CONDUCT BY A COURT OFFICIAL (magistrate, judge or otherwise)!! NEEDLESS TO SAY, WE STILL HAVE JUDGES SITTING ON THE BENCH EITHER PARTICIPATING IN THE WRONGS OR TURNING A BLIND EYE AND DEAF EAR TO YOUR PROPERTY RIGHTS!!
8. Demand your hearing!!
9. Even though the law provides other opportunities for you to contest the validity of your foreclosure, it is extremely important that you demand your right to be heard at the Rule 120 hearing and raise all of the relevant issues at this hearing. As stated earlier, the law requires that you be notified of the date and time of the hearing. The law also requires that after you receive your notice, you file a response letting the court know that you want your hearing and that you have relevant issues to bring up. Your response does not have to be in any particular legal form, but we have provided one for you on this site ("file your response"). There is also a $158.00 fee that must be paid at the time you file your response and your response must be filed no later than 7 days prior to the date and time set for the hearing. (If your hearing date is set for August 22nd.....file your response with the court no later than August 15th !)
10. Order From the Court. Although the Public Trustee sets the sale date, as stated earlier, the Public Trustee cannot proceed with the sale of your home without an order from the court first. The actual sale must be scheduled at least seven days after your foreclosure hearing. The attorneys, the lenders, the Public Trustee and the courts will often ignore this seven day provision, as well as other laws, even though the Colorado Supreme Court made this requirement crystal clear.
“Because the debtors' due process rights and statutory right to cure are at stake, we find it imperative to apply the statutes in a manner which effectuates the right to cure and also gives meaning to the due process right to a hearing. These objectives are satisfied by imposing the requirement that the foreclosure sale be held more than seven days after the Rule 120 hearing in a case. The rule is made absolute.” Kirchner v. Sanchez, 661 P.2d 1161 (Colo. 1983).
11. A foreclosure sale that does not comply with this requirement is unlawful and therefore invalid. But you, the homeowner, must raise this issue in court and fight to have this provision enforced.
FORECLOSURE SALE
12. Right to Cure. At least fifteen calendar days prior to the date the foreclosure sale is to be held, you must submit to the Public Trustee a notice of intent to cure (this means that you will pay all of the past due months to bring your loan current). The right to cure is a statutory right and even if you don’t know for sure that you will have the money to cure, it is still a very good idea to file your notice. This forms is available at the Public Trustee’s office. This notice simply means that you intend to bring your loan current prior to the actual sale of your property by the Public Trustee. If you are fortunate enough to raise the money to bring your loan current before the sale takes place, the foreclosure will terminate and you will continue to make your scheduled monthly payments as before.
13. Certificate of Purchase. Once your property goes to sale, the public trustee must issue a Certificate of Purchase to the person or entity that purchased your property at the trustee sale. The Certificate of Purchase is then recorded in the public records....Clerk and Recorders Office of the county where the property is located.
14. Even though the homeowners have no redemption rights, junior lien holders do. Once all redemption rights have expired, the public trustee will then issue a Public Trustee's Confirmation Deed.
15. Public Trustee’s Confirmation Deed. The public trustee’s deed, when issued, conveys the property out of your name and back into the lender’s name (or the investor who may have bought your home at the foreclosure sale). Let me re-emphasize that if the foreclosure is not lawfully conducted, the public trustee’s confirmation deed is a void instrument. All statutory requirements must be met before validity can be given to the public trustee's confirmation deed.
C.R.S. §38-38-504 states: “Any deed executed by an officer or other official under this article shall be prima facie evidence of compliance with all statutory requirements for the sale and execution of the deed and evidence of the truth of the recitals contained in the deed.”
16. AGAIN.....all statutory requirements must be followed, otherwise, your foreclosure is not valid and the title to your home must remain in your name! The Colorado Supreme Court, holds that the provisions of the deed of trust and statutes relating to the proceedings for the public trustee foreclosure, must be strictly followed. This is because, this method of foreclosure is one which cuts out the interests of the owner and conveys title to another private party at the hands of a public official (presumably, an unbiased public official). So if the foreclosure is not done right, ITS NOT DONE!! That’s the law.
17. And finally as we discussed earlier, pursuant to Colorado law, a void instrument cannot convey title.
“Void deeds do not convey title, and are wholly ineffective to interrupt one's right to possession of property therein described.” Concord Corporation v. Huff 144 Colo. 72, 355 P.2d 73 (1960).