Section 38-38-111 - Treatment of an overbid - agreements to assist in recovery of overbid prohibited - penalty - definition(1) An overbid shall be first applied to any deficiency as indicated in the holder's bid, and then paid to the officer to be held in escrow until the end of all redemption periods as provided in section 38-38-302.(2) Upon the expiration of all redemption periods provided in section 38-38-302, any remaining overbid shall be paid in order of recording priority to junior lienors, determined as of the recording date of the notice of election and demand or lis pendens according to the records, who have duly filed a notice of intent to redeem and whose liens have not been redeemed pursuant to section 38-38-302, in each case up to the unpaid amount of each such lienor's lien plus fees and costs. A lienor holding a lien that is not entitled to redeem by virtue of being recorded after the notice of election and demand, a lienor that has not timely filed a notice of intent to redeem pursuant to section 38-38-302, or a lienor who accepts less than a full redemption pursuant to section 38-38-302(4)(c) shall not have any claim to any portion of the overbid. After payment to all lienors and the holder entitled to receive a portion of the overbid pursuant to this section, any remaining overbid shall be paid to the borrower.(2.5)(a) If a public trustee maintains a website for his or her office, the public trustee shall include the following statement on such website: NOTICE TO A BORROWER IN FORECLOSURE: If your property goes to foreclosure auction sale and is purchased for more than the total owed to the lender and to all other lien holders, please contact the public trustee's office after the sale because you may have funds due to you.
(b) In order to pay the borrower of the property as required pursuant to subsection (2) of this section, a public trustee shall send a notice to the borrower. If the amount of remaining overbid is equal to or greater than twenty-five dollars, the public trustee shall make reasonable efforts to identify the borrower's current address. The public trustee shall mail the borrower a notice regarding the remaining overbid to the best available address no later than thirty days after the expiration of all redemption periods as provided in section 38-38-302.(c) An agreement to pay compensation to recover or assist in recovering an amount due to the borrower from the public trustee under subsection (2) of this section is not enforceable. A person who induces or attempts to induce another person to enter into such an agreement commits a class 2 misdemeanor.(3)(a)(I) When the property is sold by the sheriff, all of the sale proceeds must be deposited into the registry of the court.(II) When the property is sold by the public trustee, any unclaimed remaining overbid from a foreclosure sale shall be held by the public trustee in escrow. The remaining overbid shall be held for six months from the date of the sale. The public trustee is answerable for the funds without interest at any time within the six-month period to any person legally entitled to the funds. Any interest earned on the escrowed funds must be paid to the county at least annually. Unclaimed remaining overbids that are less than twenty-five dollars and that are not claimed within six months from the date of sale must be paid to the general fund of the county, and such money paid to the general fund of the county becomes the property of the county. Unclaimed remaining overbids that are equal to or greater than twenty-five dollars and that are not claimed within six months from the date of the sale are unclaimed property for purposes of the "Revised Uniform Unclaimed Property Act", article 13 of this title 38, and must be transferred to the administrator in accordance with article 13. After the unclaimed remaining overbids are transferred to the administrator or to the general fund of the county, the public trustee is discharged from any further liability or responsibility for the money.(b) If the unclaimed remaining overbids exceed five hundred dollars and have not been claimed by any person entitled thereto within sixty calendar days after the expiration of all redemption periods as provided by section 38-38-302, the public trustee shall, within ninety calendar days after the expiration of all redemption periods, commence publication of a notice for four weeks, which means publication once each week for five successive weeks, in a newspaper of general circulation in the county where the subject property is located. The notice must contain the name of the borrower, the borrower's address as given in the recorded instrument evidencing the borrower's interest, and the legal description and street address, if any, of the property sold at the sale and must state that an overbid was realized from the sale and that, unless the funds are claimed by the borrower or other person entitled thereto within six months after the date of sale, the funds shall be transferred to the state treasurer for disposition in accordance with the "Revised Uniform Unclaimed Property Act", article 13 of this title 38. The public trustee shall also mail a copy of the notice to the borrower at the best available address.(c) The fees and costs of publication and mailing required pursuant to this subsection (3) must be paid from the money escrowed by the public trustee.(4) A lienor who accepts a redemption amount less than the full amount of a lien or a holder of an evidence of debt who accepts a redemption amount less than the amount bid at a sale prior to the expiration of all applicable redemption periods under this article shall not be entitled to receive a portion of any excess proceeds pursuant to this section.(6) As used in this section, "borrower" means a person or entity liable under an evidence of debt constituting a mortgage loan or deed of trust.Amended by 2021 Ch. 462, § 686, eff. 3/1/2022.Amended by 2021 Ch. 199, § 2, eff. 5/28/2021.Amended by 2019 Ch. 110, § 15, eff. 7/1/2020.Amended by 2018 Ch. 138, § 6, eff. 8/8/2018.Amended by 2016 Ch. 97, § 4, eff. 8/10/2016 and applicable to proceeds of foreclosure sales conducted on, after, or up to five years before the 8/10/2016.L. 90: Entire article R&RE, p. 1662, § 2, effective October 1. L. 2002: Entire section amended, p. 1341, § 11, effective July 1. L. 2004: (2) amended, p. 1207, § 85, effective August 4. L. 2006: Entire section amended, p. 1464, § 17, effective January 1, 2008. L. 2007: (2) amended and (4) added, p. 1838, § 14, effective January 1, 2008. L. 2009: (1) and (2) amended, (HB 09-1207), ch. 716, p. 716, § 12, effective September 1. L. 2012: (1), (2), and (3) amended and (2.5) and (5) added, (SB 12-030), ch. 322, p. 322, § 10, effective September 1. L. 2016: (2.5)(c) added and (3)(a) and (3)(b) amended, (HB 16 -1090), ch. 277, p. 277, § 4, effective August 10. L. 2018: (3) amended, (HB 18-1254), ch. 909, p. 909, § 6, effective August 8. L. 2019: (3)(a) and (3)(b) amended, (SB 19-088), ch. 469, p. 469, § 15, effective July 1, 2020. L. 2021: (2), (2.5), and (3)(b) amended, (5) repealed, and (6) added, (HB 21-1224), ch. 1057, p. 1057, § 2, effective May 28; (2.5)(c) amended, (SB 21-271), ch. 3293, p. 3293, § 686, effective March 1, 2022.(1) This section is similar to former § 38-37-113, as it existed prior to 1990.
(2) The effective date for amendments made to this section by chapter 305, Session Laws of Colorado 2006, was changed from July 1, 2007, to January 1, 2008, by section 27 of chapter 404, Session Laws of Colorado 2007. (See L. 2007, p. 1849.)
(3) Amendments to subsection (2.5)(c) by HB 21-1224 and SB 21-271 were harmonized, effective March 1, 2022.
(4) Section 803(2) of chapter 462 (SB 21-271), Session Laws of Colorado 2021, provides that the act changing this section applies to offenses committed on or after March 1, 2022.
2021 Ch. 462, was passed without a safety clause. See Colo. Const. art. V, § 1(3). For the legislative declaration in HB 16-1090, see section 1 of chapter 97, Session Laws of Colorado 2016.