In the topsy-turvy world of real estate, it is good to know and understand the laws that are in place to protect the rights of lenders as well as homeowners. There often is a great deal of confusion concerning judgments. Colorado has laws specifically designed for real estate transactions. Knowing your rights under the law is very important.
In Colorado if a homeowner fails to pay property tax, they may receive a tax lien judgment. This judgment simply means that the homeowner will have their real estate sold at public auction to remedy the debt. Under Colorado law, potential buyers may apply for a tax certificate as soon as the property taxes become delinquent.
The homeowner is allowed to redeem the property at any time before a tax lien judgment or deed is issued. In Colorado a tax lien judgment is issued three years after the tax lien is placed on a property.
Foreclosure matters are also covered under Colorado law. Should a homeowner default on a home loan, lenders can apply for a foreclosure judgment. Defaulting on a home loan simply means the homeowner failed to make scheduled mortgage payments, did not maintain insurance on the property or comply with the terms of the mortgage loan.
In Colorado, the most common foreclosure judgment is a nonjudicial foreclosure. This type of foreclosure allows the lender to obtain a judgment of foreclosure without going through the court system. Lenders foreclosing using this method must have a power of sale clause in the original loan documents.
A power of sale clause gives the lender the right to sell the home without obtaining a court order if the owner fails to abide by the loan terms. If there is no power of sale clause in the original loan document the lender must use judicial foreclosure. This requires the lender to obtain a court date to receive a judgment of foreclosure.
Laws are written to protect both parties to a real estate transaction. In today's real estate environment, it is best to familiarize youself the regulations.
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Understanding Real Estate Judgment Laws in Colorado
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