2021 Colorado Code
Title 38 - Property - Real and Personal
Article 38 - Foreclosure Sales
Part 1 - Foreclosure Sale
§ 38-38-104. Right to Cure When Default Is Nonpayment - Right to Cure for Certain Technical Defaults

1. Unless the order authorizing the sale described in section 38-38-105 contains a determination that there is a reasonable probability that a default in the terms of the evidence of debt, deed of trust, or other lien being foreclosed other than nonpayment of sums due thereunder has occurred, any of the following persons is entitled to cure the default if the person files with the officer, no later than fifteen calendar days prior to the date of sale, a written notice of intent to cure together with evidence of the person's right to cure to the satisfaction of the officer:
   1. 1. The owner of the property as of the date and time of the recording of the notice of election and demand or lis pendens as evidenced in the records; (a) (I) The owner of the property as of the date and time of the recording of the notice of election and demand or lis pendens as evidenced in the records;
      2. If the owner of the property is dead or incapacitated on or after the date and time of the recording of the notice of election and demand or lis pendens, the owner's heirs, personal representative, legal guardian, or conservator as of the time of filing of the notice of intent to cure, whether or not such person's interest is shown in the records, or any co-owner of the property if the co-owner's ownership interest is evidenced in the records as of the date and time of the recording of the notice of election and demand or lis pendens;
      3. A transferee of the property as evidenced in the records as of the time of filing of the notice of intent to cure if the transferee was the property owner's spouse as of the date and time of the recording of the notice of election and demand or lis pendens or if the transferee is wholly owned or controlled by the property owner, is wholly owned or controlled by the controlling owner of the property owner, or is the controlling owner of the property owner;
      4. A transferee or owner of the property by virtue of merger or other similar event or by operation of law occurring after the date and time of the recording of the notice of election and demand or lis pendens; or
      5. The holder of an order or judgment entered by a court of competent jurisdiction as evidenced in the records after the date and time of the recording of the notice of election and demand or lis pendens ordering title to the property to be vested in a person other than the owner;

   2. A person liable under the evidence of debt;
   3. A surety or guarantor of the evidence of debt; or
   4. A holder of an interest junior to the lien being foreclosed by virtue of being a lienor or lessee of, or a holder of an easement or license on, the property or a contract vendee of the property, if the instrument evidencing the interest was recorded in the records prior to the date and time of the recording of the notice of election and demand or lis pendens. If, prior to the date and time of the recording of the notice of election and demand or lis pendens, a lien is recorded in an incorrect county, the holder's rights under this section shall only be valid if the lien is rerecorded in the correct county at least fifteen calendar days prior to the actual date of sale.

2. 1. 1. Promptly upon receipt of a notice of intent to cure by the officer, but no less than twelve calendar days prior to the date of sale, the officer shall transmit by mail, facsimile, or electronic means to the person executing the notice of election and demand a request for a statement of all sums necessary to cure the default. The attorney for the holder or servicer or, if none, the holder or servicer, shall file the cure statement with the officer, and the cure statement must set forth the amounts necessary to cure. Upon receipt of the statement of the amounts needed to cure, the officer shall transmit in writing to the person filing the notice of intent to cure the default: (a) (I)Promptly upon receipt of a notice of intent to cure by the officer, but no less than twelve calendar days prior to the date of sale, the officer shall transmit by mail, facsimile, or electronic means to the person executing the notice of election and demand a request for a statement of all sums necessary to cure the default. The attorney for the holder or servicer or, if none, the holder or servicer, shall file the cure statement with the officer, and the cure statement must set forth the amounts necessary to cure. Upon receipt of the statement of the amounts needed to cure, the officer shall transmit in writing to the person filing the notice of intent to cure the default:
         1. The cure statement; and
         2. A statement that the person filing the notice of intent to cure is entitled to receive from the attorney for the holder or servicer or, if not represented, from the holder or servicer, upon written request mailed to the attorney for the holder or servicer or, if not represented, to the holder or servicer at the address stated on the cure statement, copies of receipts or other credible evidence to support the costs claimed on the cure statement. This request may be sent only after payment to the officer of the amount shown on the cure statement and must be sent within ninety days after payment of the cure amount.

      2. If a cure statement is required pursuant to subparagraph (I) of this paragraph (a), the holder of the evidence of debt shall submit a signed and acknowledged cure statement, or the office of the attorney for the holder shall submit a signed cure statement, specifying the following amounts, itemized in substantially the following categories and in substantially the following form:
      3. The cure statement is a representation of fact, made upon the current information and belief of the person signing it. If the holder or servicer determines that there is an inaccurate amount contained in the cure statement, the holder or servicer, or the attorney for the holder or servicer, shall inform the officer immediately and provide a cure statement with updated figures; except that any additional or increased amounts must be added at least ten calendar days before the effective date of the original cure statement. If an inaccurate amount is reported and a corrected cure statement is not provided within the time specified in this subparagraph (III), the officer may continue the sale for one week in accordance with section 38-38-109 (1). An estimate as allowed under subsection (5) of this section is not an inaccurate amount for purposes of this subparagraph (III).
      4. Within seven business days after the officer's notification to the holder or servicer, or to the attorney for the holder or servicer, that the officer has received the funds necessary to cure the default as reflected on the initial or updated cure statement, the holder or servicer or the attorney for the holder or servicer shall deliver to the officer a final statement, reconciled for estimated amounts that were not or would not be incurred as of the date the cure proceeds were received by the officer, along with receipts or invoices for all rule 120 docket costs and all statutorily mandated posting costs claimed on the cure statement. All amounts of cure proceeds received by the officer in excess of the amounts reflected on the final statement shall be remitted by the officer to the person who paid the cure amount.
      5. (A) The holder or servicer shall remit to the person who paid the cure amount any portion of the cure amount that represents a fee or cost listed on the cure statement that exceeds the amount actually incurred and that was not remitted by the officer in accordance with subparagraph (I) of paragraph (d) of this subsection (2).
      6. The holder or servicer is responsible for retaining receipts or other credible evidence to support all costs claimed on the cure statement, including rule 120 docket fees and posting costs, and the person who paid the cure amount is entitled to receive copies upon written request mailed to the attorney for the holder or servicer or, if not represented, to the holder or servicer at the address stated on the cure statement. The request may be made at any time after payment to the officer of the amount shown on the cure statement, but must be made within ninety days after payment of the cure amount. The attorney for the holder or servicer or, if not represented, the holder or servicer shall provide copies of all receipts or other credible evidence within thirty days after receiving the request, and may provide the copies electronically.

   2. No later than 12 noon on the day before the sale, the person desiring to cure the default shall pay to the officer all sums that are due and owing under the evidence of debt and deed of trust or other lien being foreclosed and all fees and costs of the holder of the evidence of debt allowable under the evidence of debt, deed of trust, or other lien being foreclosed through the effective date that are set forth in the cure statement; except that any principal that would not have been due in the absence of acceleration shall not be included in such sums due.
   3. If a cure is made, interest for the period of any continuance pursuant to section 38-38-109 (1)(c) shall be allowed only at the regular rate and not at the default rate as may be specified in the evidence of debt, deed of trust, or other lien being foreclosed. If a cure is not made, interest at the default rate, if specified in the evidence of debt, deed of trust, or other lien being foreclosed, for the period of the continuance shall be allowed.
   4. 1. Upon receipt of the cure amount, and conditioned upon the withdrawal or dismissal of the foreclosure from the holder or servicer or the attorney for the holder or servicer, the officer shall: (d) (I) Upon receipt of the cure amount, and conditioned upon the withdrawal or dismissal of the foreclosure from the holder or servicer or the attorney for the holder or servicer, the officer shall:
         1. Deliver the cure amount, less the fees and costs of the officer and any adjustments required under subparagraph (III) of paragraph (a) of this subsection (2), to the attorney for the holder or servicer or, if none, to the holder or servicer; and
         2. Obtain and retain, in the officer's records, the name and mailing address of the person who paid the cure amount.

      2. Following the withdrawal or dismissal, the evidence of debt shall be returned uncancelled to the attorney for the holder or servicer or, if none, to the holder or servicer by the public trustee or to the court by the sheriff.

3. Where the default in the terms of the evidence of debt, deed of trust, or other lien on which the holder of the evidence of debt claims the right to foreclose is the failure of a party to furnish balance sheets or tax returns, any person entitled to cure pursuant to paragraph
   1. of subsection (2) of this section may cure such default in the manner prescribed in this section by providing to the holder or the attorney for the holder the required balance sheets, tax returns, or other adequate evidence of the party's financial condition so long as all sums currently due under the evidence of debt have been paid and all amounts due under paragraph (b) of subsection (2) of this section, where applicable, have been paid.

4. Any person liable on the debt and the grantor of the deed of trust or other lien being foreclosed shall be deemed to have given the necessary consent to allow the holder of the evidence of debt or the attorney for the holder to provide the information specified in paragraph
   1. of subsection (2) of this section to the officer and all other persons who may assert a right to cure pursuant to this section.

5. A cure statement pursuant to paragraph
   1. of subsection (2) of this section shall state the period for which it is effective. The cure statement shall be effective for at least ten calendar days after the date the cure statement is received by the officer or until the last day to cure under paragraph (b) of subsection (2) of this section, whichever occurs first. The cure statement shall be effective for no more than thirty calendar days after the date the cure statement is received by the officer or until the last day to cure under paragraph (b) of subsection (2) of this section, whichever occurs first. The use of good faith estimates in the cure statement with respect to interest and fees and costs is specifically authorized by this article, so long as the cure statement states that it is a good faith estimate effective through the last day to cure as indicated in the cure statement. The use of a good faith estimate in the cure statement shall not change or extend the period or effective date of a cure statement.

6. Following expiration of the period for which the cure statement is effective, but no less than fifteen calendar days prior to the date of sale, the person who originally submitted the notice of intent to cure may make a written request to the public trustee for an update of the amount necessary to cure. Upon receipt by the public trustee of such written request for updated cure figures, subsection (2) of this section shall apply.
7. If the holder of the evidence of debt or the attorney for the holder receives a request for a cure statement under paragraph
   1. of subsection (2) of this section and does not file a cure statement with the officer by the earlier of ten business days after receipt of the request or the eighth calendar day before the date of the sale, the officer shall continue the sale for one week. Thereafter and until the cure statement is filed, the officer shall continue the sale an additional week for each week that the holder fails to file the cure statement; except that the sale shall not be continued beyond the period of continuance allowed under section 38-38-109 (1)(a). A cure statement must be received by 12 noon on the day it is due in order to meet a deadline set forth in this subsection (7).

CURE STATEMENT

To: =rf

Public Trustee (or Sheriff) of the County (or City and County) of =hr3 , State of Colorado (hereinafter the “officer”).

Foreclosure sale number: :u1500 =hr8 Grantor: :u800 =hr8 The date through which the cure statement is effective: :u1500 =hr8 The following is an itemization of all sums necessary to cure the default (any amount that is based on a good faith estimate is indicated with an asterisk): Payments due under the evidence of debt: =hr8 payments of $ =hr8 each Accrued late charges :u2240 =hr8 Other amounts due under the evidence of debt (specify) :u600 =hr8 :u2240 =hr8 :u600 =hr8 :u2240 =hr8 Property inspections :u2240 =hr8 Property, general liability, and casualty insurance :u2240 =hr8 Certificate of taxes due :u2240 =hr8 Property taxes paid by the holder :u2240 =hr8 Owner association assessment paid by the holder :u2240 =hr8 Permitted amounts paid on prior liens :u2240 =hr8 Less impound/escrow account credit :u2240 =hr8 Plus impound/escrow account deficiency :u2240 =hr8 Title costs :u2240 =hr8 Rule 120 docket fee :u2240 =hr8 Rule 120 posting costs :u2240 =hr8 Court costs :u2240 =hr8 Postage/delivery costs :u2240 =hr8 Service/posting costs :u2240 =hr8 Attorney fees :u2240 =hr8 Other fees and costs (specify): :u600 =hr8 :u2240 =hr8 :u600 =hr8 :u2240 =hr8 Reinstatement total =sr $ =hr8

(Does not include officer's fees and costs)

Officer's fees and costs =sr $ =hr8 =sr (To be added by officer) Total to cure =sr $ =hr8 =sr (To be added by officer) IT MAY TAKE SEVERAL DAYS BEFORE THE CURE IS PROCESSED AND ENTERED INTO THE HOLDER'S RECORDS. The total to cure does not include any future monthly mortgage payments that may be due. Name of the holder of the evidence of debt and the attorney for the holder: :u500 Holder: =lf =nl Attorney: =lf =nl Printed name: =lf =nl Signature: =lf =nl Attorney address: =lf =nl Attorney business telephone: =lf

History. Source: L. 90: Entire article R&RE, p. 1657, § 2, effective October 1. L. 91: (2) amended, p. 1922, § 53, effective June 1. L. 92: (1) amended, p. 2090, § 3, effective July 1. L. 94: (2.5) added, p. 1674, § 1, effective July 1. L. 2002: Entire section amended, p. 1336, § 8, effective July 1. L. 2006: Entire section R&RE amended, p. 1449, § 10, effective January 1, 2008. L. 2007: IP(1) and (5) amended, p. 1833, § 8, effective January 1, 2008. L. 2009: (1)(a)(V), (1)(d), and (2)(a) amended and (6) and (7) added,(HB 09-1207), ch. 164, p. 710, § 7, effective January 1, 2010. L. 2012: (2)(a), (2)(b), (5), and (7) amended,(SB 12-030), ch. 96, p. 315, § 6, effective September 1. L. 2014: (2)(a)(I) and (2)(d) amended and (2)(a)(III), (2)(a)(IV), (2)(a)(V), and (2)(a)(VI) added,(HB 14-1130), ch. 156, p. 542, § 3, effective May 9.

1. This section is similar to former § 38-39-118, 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. (SeeL. 2007, p. 1849.)

Law reviews. For article, “Foreclosure by Sale by Public Trustee of Deeds of Trust in Colorado”, see 28 Dicta 437 (1951). For article, “Statutory Redemption in Colorado”, see 30 Dicta 79 (1953). For comment discussing Colorado's curative default statute in light of Foster Lumber Co. v. Weston Constructors, 33 Colo. App. 436, 521 P.2d 1294 (1974), see 52 Den. L.J. 637 (1975). For comment, “The Effect of Certified Realty on Mortgage Foreclosure in Colorado”, appearing below, see 52 U. Colo. L. Rev. 301 (1981). For comment, “The Effect of Certified Realty Corp. v. Smith on Mortgage Foreclosure in Colorado”, see 52 U. Colo. L. Rev. 301 (1981). For article, “Election to Sue on a Mortgage Note in Lieu of Foreclosure”, see 13 Colo. Law. 621 (1984). For article, “Limitation of Bank's Liabilities in Letters of Credit Agreements”, see 15 Colo. Law. 1019 (1986). For article, “Forever is an Awfully Long Time: Affordable Housing Covenants in Colorado (Part II)”, see 48 Colo. Law. 44 (Aug.-Sept. 2019).

Annotator's note. Since § 38-38-104 is similar to § 38-39-118 as it existed prior to the 1990 repeal and reenactment of this article and article 39, relevant cases construing that provision have been included in the annotations to this section.

Applicability of section. This section applies only where foreclosure action has been initiated. Certified Realty Corp. v. Smith, 198 Colo. 222 , 597 P.2d 1043 (1979).

This section applies to a situation where default in the terms of a note and deed of trust consists, not only of nonpayment of principal and interest, but also of failure to pay real property taxes. Foster Lumber Co. v. Weston Constructors, Inc., 33 Colo. App. 436, 521 P.2d 1294 (1974).

Section modified common law by limiting acceleration right. This section has modified the common law by limiting right of acceleration. Foster Lumber Co. v. Weston Constructors, Inc., 33 Colo. App. 436, 521 P.2d 1294 (1974).

When the action involves only a default of payment and the deed of trust or mortgage is being foreclosed, this section limits the effectiveness of an acceleration clause. Smith v. Certified Realty Corp., 41 Colo. App. 170, 585 P.2d 293 (1978), aff'd, 198 Colo. 222 , 597 P.2d 1043 (1979).

Section prevents foreclosure if creditor's interests not jeopardized. This section must be interpreted so as to carry out its general legislative intent which was to permit debtors to prevent foreclosure of mortgages or deeds of trust in instances in which the creditor's interests will not be jeopardized. Foster Lumber Co. v. Weston Constructors, Inc., 33 Colo. App. 436, 521 P.2d 1294 (1974); Jacobs Invs. v. PRD Holdings, Ltd., 44 Colo. App. 184, 612 P.2d 1149 (1980).

And cures default on note, deed of trust, or mortgage. This section specifically refers to defaults on “the note, deed of trust, or mortgage” and was obviously intended to permit a debtor to cure a default in the terms of either instrument. Foster Lumber Co. v. Weston Constructors, Inc., 33 Colo. App. 436, 521 P.2d 1294 (1974).

Section does not limit the number of times a debtor can cure defaults. Jacobs Invs. v. PRD Holdings, Ltd., 44 Colo. App. 184, 612 P.2d 1149 (1980).

Subsection (3) protects the creditor from the allegation that he has waived his future right to accelerate and to foreclose upon default because the debtor was able to cure defaults at an earlier time. Jacobs Invs. v. PRD Holdings, Ltd., 44 Colo. App. 184, 612 P.2d 1149 (1980).

No equitable right to cure default in action on promissory note. There is no equitable right to cure default in action brought solely on promissory note. Smith v. Certified Realty Corp., 41 Colo. App. 170, 585 P.2d 293 (1978), aff'd, 198 Colo. 222 , 597 P.2d 1043 (1979).

Postponement of sale also postpones deadline for curing default. When the date of a foreclosure sale is postponed, the deadline for curing the default, notice to the public trustee of intention to cure at least seven days prior to the sale, is correspondingly postponed. Kirchner v. Sanchez, 661 P.2d 1161 (Colo. 1983).

Acceleration clause enforceable. Where suit after default of payment is on the note only and the creditor does not bring an action to foreclose on the security, i.e., the deed of trust, the acceleration clause in the note is enforceable, and the debtor has no statutory or equitable right to cure the money default. Smith v. Certified Realty Corp., 41 Colo. App. 170, 585 P.2d 293 (1978), aff'd, 198 Colo. 222 , 597 P.2d 1043 (1979).

Statutory coverage triggered by initiation of foreclosure proceedings. Because by its terms this section applies only to deeds of trust or mortgages “being foreclosed” and the statutory mechanism for tender operates through the public trustees or other officers “conducting the sale”, statutory coverage is triggered by initiation of foreclosure proceedings on the mortgage or deed of trust. Foster Lumber Co. v. Weston Constructors, Inc., 33 Colo. App. 436, 521 P.2d 1294 (1974).

Attorney fees. When a deed of trust is foreclosed as a mortgage, the court may award attorney fees. Bakers Park Mining & Milling Co. v. District Court, 662 P.2d 483 (Colo. 1983).

To cure default, debtor is required to pay interest at the default rate on the entire balance of the debt for the period during which the note was in default plus all delinquent principal. Foothills Apartments v. Fischer, 693 P.2d 395 (Colo. App. 1984).

No partial cure of default. Default is either cured or not cured, and if “cured” then it is as if no default occurred. The effect of curing default under the foreclosure statute is to put parties in the same position as they would have been had no default occurred. Foothills Apartments v. Fischer, 693 P.2d 395 (Colo. App. 1984).

Parties returned to original status following timely tender. This section allows one liable, under a note and deed of trust or mortgage, whose only default is nonpayment, to cure the default by tender of the delinquent payments due plus costs, late charges, and attorneys' fees. If such a tender is made within five (now seven) days of the foreclosure sale, the foreclosure action is terminated and the parties are returned to their original status. Ulander v. Allen, 37 Colo. App. 279, 544 P.2d 1001 (1976).

There is no statutorily prescribed remedy for failure to comply with this section. Burrell Registration Co. v. McKelvey, 194 Colo. 157 , 570 P.2d 248 (1977).

Bankruptcy court lacks authority to extend statutory time to cure default after the certificate of purchase has been issued. Benford-Whiting Co. v. Robertson, 4 B.R. 213 (Bankr. D. Colo. 1980 ).