Stopping Foreclosure – Don’t Ignore the Rule 120 Notice

Foreclosure Information

If you’re in the unfortunate position of facing a foreclosure on your home or property, your options to stop the foreclosure diminish as the sale date approaches. The closer the sale date, the less interested a lender will be in negotiating a loan modification, short sale, or other accommodation with the borrower. After all, they have incurred legal fees in initiating the foreclosure process, and in most cases, will receive title to the property shortly after the sale is conducted. Thus, the closer the sale date, the less incentive there is for the lender to negotiate with the borrower.

Rule 120 Notice

However, under Colorado law, a lender must obtain a court order before the public trustee can conduct a foreclosure sale. This process is initiated by the lender’s attorney filing a motion with the Court for an order authorizing the sale pursuant to Rule 120 of the Colorado Rules of Civil Procedure. The lender must provide notice of this motion to the borrower, and the borrower has a right to file a written response with the Court and request a hearing. In essence, this provides the borrower with due process and an opportunity to have their “day in court”. Unfortunately, many homeowners ignore the Rule 120 notice, and waive their right to assert defenses that would possibly save their property from foreclosure.

How Can I Stop My Foreclosure?

Rule 120 was originally intended to protect members of the military service from prejudice resulting from foreclosure proceedings commenced against them during their military service. However the scope of the rule has been extended by case law to require that a court consider all relevant evidence in determining whether the borrower has defaulted under the promissory note held by the lender. Thus, a borrower may be able to successfully argue in a Rule 120 hearing that they made all of the payments to the the lender, or that the lender failed to provide proper notice of a default, as required by the promissory note, or that the lender violated the terms of a oral or written loan modification agreement. With the numerous transfers of loans by banks, a borrower may also be able to challenge whether the foreclosure lender is the real party in interest and the true owner of the loan.

Contact An Attorney

The important thing to note is that the homeowner does have an ability to contest the foreclosure process by responding to the Rule 120 notice. But you can’t ignore the notice when it arrives in the mail. Act quickly and retain a real estate attorney if you think you have a legitimate defense to the lender’s claim that you defaulted on the promissory note.

Eric L. Nesbitt, Esq.
Law Offices of Eric L. Nesbitt, PC
Phone 303-741-2354
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