Legal Definition

Foreclosure is the act of selling, by legal proceedings, real property to satisfy the obligations of the landowner to a third party. It is the procedure whereby property pledged as security, as a deed of trust, is sold to pay the debt in the event of default in payment.

In Colorado, the deed of trust that secures the debt is an agreement between three parties: the Grantor (owner), the Beneficiary (lender) and the Public Trustee (who has the power of sale--right to sell property at public auction in the event of default).

The Public Trustee's Role

The Public Trustee, by law, serves as the neutral, intermediate party between the lender and the borrower to assure that each party can exercise its legal rights in a foreclosure action. The Public Trustee is not an attorney and cannot provide legal advice to any parties involved in the foreclosure action.

The procedure for conducting the foreclosure is set by Colorado Revised Statutes, Title 38, Articles 37 and 38.