Imagine this scenario: You have a mortgage on a nice family home, which you have owned with your spouse for many years. Along the way you had two kids and added an extra bedroom. You took out a line of credit to pay for this remodel. Your kids are now in their early teenage years – playing soccer in the fall, enjoying snowboarding in the winter and biking in the summer. It was the perfect life. Until your spouse divorced you.
But, you got the house in which to raise the kids, along with the mortgage. Then the company you worked for had financial difficulties and laid you off. You have had a difficult time finding comparable employment. Neither your ex-spouse nor your parents can help with the mortgage. You, dear reader, can guess what happened next.
If you lived in one of the other 49 states, your lender would start a foreclosure process that looks very different from the one we have in Colorado. And that’s where the “public trustee” comes in to this process. So what does a public trustee do? And why is Colorado the only state in the union with a public trustee?
Well, back when Colorado was primarily a mining and agricultural territory and becoming a state, banks would loan money to these entrepreneurs in order to help them get their businesses started. Sometimes, greedy bankers would “foreclose” on these properties before the farmers could sell the corn, or miners could assay the gold. They even employed nefarious characters to assist them in this process, giving these characters bonuses the faster they foreclosed. The state lawmakers at the time didn’t like this practice, so they created a “public trustee” as part of the state statutes. Among other things, this person acts as a neutral third party in the foreclosure process, assisting both the property owner and the lender.
When you take out a mortgage, your mortgage lender creates a “deed of trust” with the public trustee of the county where the property is located. In La Plata County, that is me. This is why you will see my name on properties in foreclosure on the La Plata County website. Rest assured, legally, I cannot (and do not) own these properties.
But, back to the deed of trust. The deed of trust is not a mortgage, but becomes attached to your mortgage and is recorded with the county clerk. A deed of trust only gives the public trustee (me) the power to sell your property if you violate the covenants of your mortgage, meaning you do not pay your lender back, and the lender elects to foreclose on your property. The public trustee manages only the sale process.
The lenders, and the lender’s lawyers, are all very familiar with this process – but you, probably, are not. And, if you are in foreclosure, you have enough other stresses in your life – you certainly do not need the added one of figuring out the legalities of foreclosure!
Also, you can ill-afford the added expense of hiring a lawyer. That’s when you need the Public Trustee, and that’s why, if you’re going to be foreclosed upon, this is the best state for it to happen to you.
The laws in Colorado with respect to foreclosure are written from the vantage of wanting the homeowner to succeed in coming out of foreclosure and not adding a lot of additional debt in the process. Yes, there will be additional costs to pay, but these will be much, much lower in Colorado, than in any of the other 49 states.
So if you happen to be in the unfortunate situation of foreclosure, or know someone who is, please call the La Plata County Public Trustee’s Office. We are here to help guide you through the rules and timelines of foreclosure, at no charge to you.
The public trustee is not a lawyer, and our office does not give legal advice. But we do have a list of local and state resources that can assist homeowners in foreclosure. A fair number of people in La Plata County have suffered through this process, especially after the housing market crashed in 2008. These people may be your friends, neighbors or relatives. Many of them still live in their original homes. And these people are contributing their gifts and talents to our community. This is why the public trustee is a valuable resource in our county.
Allison Morrissey is the La Plata County treasurer and public trustee. Reach her at Allison.Morrissey@co.laplata.co.us.