Minutes from Public Trustee Legislative Committee Meeting, held 10 a.m. to 3 p.m. on Friday August 22 in the Jefferson County Administration Building.

Notes refer to matrix of issues maintained by Bob Sagel.

New business:

Discussion of Bond Requirement for Judicial Foreclosure of Real Property.  This would add a provision to C.R.S. 13-16-101 requiring posting of a bond for judicial foreclosures.  The committee was generally supportive of including that provision in our Cleanup bill.

Rich Krohn added three items to the matrix, items 12.i-k, to be discussed later.

Old business:

1.b:  Suggested language approved.

1.g:  Suggested language approved.

2.b:  Suggested language approved with modification to “…as set forth in the mailing list or most recent amended mailing list, if any.”

2.h:  Suggested language approved.  A handout indicated that the Public Trustees supported retaining publication of combined notices by a vote of 41-3.

3.d:  Concept of late intents has support, but details to difficult to work out.  Proposed change is struck.

4.c:  Concept approved; include the STREET ADDRESS of the property on the bid; specific language to be left to the drafters.

6.a:  Suggested language approved with modification to “…within ten business days but no later than close of business on the eighth calendar day before the date of sale…”  OPEN ISSUE:  Agree to add language in 38-38-109 referring to this provision, but specific language and its location not discussed.

7.b:  Suggested language approved, with removal of the phrase “the sum of the fees… moneys due”. 

7.c:  Suggested language approved, with deletion of the section “first to the holder…and second”  That section is redundant to 7.b.

9.a:  Changes struck; problem will be addressed through education of PTs.

9.b:  Suggested concept approved; language to be reviewed by Legislative Drafting.

9.c:  Issue passed to drafters for resolution as needed.

12.a:  Tabled.  Rich Krohn prefers to add language that the PTs have no obligation to disburse funds until they have been irrevocably deposited.  Carol and Tom are concerned that such language would lead to an implied duty to wait up to 3 weeks for disbursement, which would be impractical.  Disbursing funds that may be called back by the bank also creates problems.  This remains an OPEN ISSUE.

12.d:   OPEN ISSUE:  No proposed wording yet.  Discussion ensued about how to handle a re-recorded Deed of Trust without the borrower's signature and whether that could or would suffice to correct a legal description.  There was no consensus on whether or not to accept such re-recordings without supporting documentation of some sort.

12.e:  Consensus is to address HOA liens and assignments by policy rather than by law.  That policy is that HOA liens would need to be supported by evidence per 38-38-302 (1.f) and 38-38-104 (d).  This evidence would be in the form of a notarized affidavit from an official of the HOA stating the reception date of the declaration of covenants for the HOA, the amount of delinquent HOA fees, and a breakdown of the time period of the delinquency into delinquencies incurred after the recording of the NED (junior, but with no redemption rights), delinquencies incurred in the six months prior to the recording of the NED (senior super-priority, thus no redemption rights), and delinquencies incurred more than six months prior to the recording of the NED (junior only to the first deed of trust, and thus with redemption rights after a foreclosure on that deed).  This will likely be re-opened in the future.

12.g: Consensus that legal opinions may be charged to a foreclosure per 38-37-104(1.b.X); no need to add specific language.

12.h:  Suggested language approved.

12.i:  NEW ITEM:  38-38-101(8) is silent on what to require if the evidence of debt is transferred to a non-qualified holder. Consensus that the new holder must provide the evidence of debt or a surety bond.  OPEN ISSUE with respect to specific language.

12.j:  NEW ITEM:  38-38-109(3.b) is silent on what happens if the lender asks the Public Trustee not to process the administrative withdrawal.  Consensus to replace “…requesting that such withdrawal not be recorded is received…” with “…requesting that such withdrawal be delayed for 90 days is received…”.  It was noted that it could be considered only a "90 day stay" and if something like a court order or other affirmative action had not been taken during that 90 day period, then the PT could proceed with administrative withdrawal without further notice. 

12.k:  NEW ITEM:  38-38-100.3(18) reference to property is defined elsewhere in the C.R.S. as both real and personal property, thus there is a right to foreclose on personal property.  A mobile home is both personal property and a vehicle; if the title is purged it becomes part of the real property to which it is affixed.  Thus it need not be mentioned in the Deed, but if it is listed then it may be considered a separate parcel.  Also, there was discussion on documents that "combined" documents, such as a Deed of Trust, Security Agreement, Financing Statement, and etc.  OPEN ISSUE with respect to whether or not the mobile home needs to be accounted for in an NED, how to handle "combined" documents, and whether or not any legislative changes are desired.

There was discussion on what a "novation" is and its effect as a substitution of parties.  It was generally felt that this does not affect Public Trustees.

Next meeting of the legislative committee:  Thursday 25 September at 10 a.m., hosted by the Weld County Public Trustee.  This meeting should resolve all remaining open issues, and develop a legislative strategy.

Submitted by Tom Mowle