Colorado Foreclosures: New and Improved Rule 120 Hearing

Colorado homeowners are now permitted to raise additional issues at a Rule 120 hearing to fight a nonjudicial foreclosure.

Colorado foreclosures are generally nonjudicial, with a public trustee administering the out-of-court process. As part of a Colorado nonjudicial foreclosure, though, a court must issue an order authorizing the foreclosure sale.

To get the order, the foreclosing bank’s attorney files a motion under Rule 120 of the Colorado Rules of Civil Procedure asking the court for an order authorizing the foreclosure sale. After the bank files the motion, the clerk sets a deadline by which any response to the motion must be filed. The bank then, no less than 14 days before the response deadline, serves a notice to the borrower about the right to file and serve a response. If the borrower doesn’t file a response—and most don’t—the court generally cancels the hearing and enters an order allowing the foreclosure sale. If the borrower files a response, the court will review the response and grant or deny the bank’s motion, or set a hearing, commonly called a "Rule 120 hearing."

In the past, a borrower facing foreclosure was permitted to bring up only two issues at a Rule 120 hearing: whether the loan was actually in default, and whether the borrower was in the military and entitled to protections under the Servicemembers Civil Relief Act (SCRA). Rule 120 of the Colorado Rules of Civil Procedure recently changed, however, to expand the scope of the issues that a borrower may raise at the hearing.

Now, a borrower facing foreclosure may also raise the following matters, if applicable, at a Rule 120 hearing to challenge the foreclosure:

These changes provide Colorado homeowners facing a nonjudicial foreclosure an expanded opportunity to go in front of a court and explain why the foreclosure should not go forward—so long as the reason is based one of the four matters described above.

If you want to dispute a nonjudicial foreclosure in Colorado on grounds that are within the limits discussed, you have to file a written response with the court and serve it to the foreclosing party by the deadline. You also have to go to the Rule 120 hearing if the court sets one. Making a successful legal argument is complicated and ensuring you follow all of the court-required procedures can be difficult. If you want to fight a nonjudicial foreclosure through a Rule 120 hearing, consider hiring a foreclosure attorney to help you.

Effective date: March 1, 2018