Mortgage Laws
You too may be thinking of home ownership or mortgage loan in the Colorado state which is home to four million people. In order to help you gain information in this regard, the general features and special aspects of the mortgage industry in this state have been presented here
In Colorado, the laws relating to mortgage are mainly governed by state statutory
and common law. The mortgages are regulated by federal or state law or agencies.
- The Division of Securities, Department of Regulatory Agencies regulates the
mortgage broker licenses in the state.
- Any mortgage broker raising money from individual investors to fund
mortgages have to be licensed under the state securities laws.
- However, many mortgage brokers and dealers are exempt from Colorado
licensing requirements. Mortgage brokers whose business is limited exclusively
to placing mortgage loans with institutional investors fall in the category
of licensing requirements exemption.
- The state's mortgage industry is loosely organized. Hence, the
Colorado Mortgage Association's policies rarely affect the activities
of the members. The Colorado Mortgage Association is also quite free from the
influence of realtor associations.
- Considerable efforts are being made to ensure that the loan originators
in Colorado are licensed in the state. However, in the absence of an effective
law mere licensing may not reduce incidents of predatory lending.
- The mortgage rates and loan application standards are fixed by the
individual companies.
- The mortgage may be a purchase money mortgage for the purchase of a
dwelling occupied by the purchaser. In such case the purchaser will not be held
responsible for any deficiency under the anti-deficiency laws.
- Any home loan applicant in the state has a right to obtain clear, truthful
and timely information. All Colorado home buyer mortgage information has
to be presented to the buyer in English and understandable language so that
no intention of deceit finds place.
- It is unlawful under the Fair Housing Act and the Equal Credit Opportunity
Act if a lender decides whether one can qualify for a loan or offers less favorable
terms for reasons like one's race, national origin, sex, color, religion,
handicap, financial status and such other prohibited factors.
- In the state both the Judicial and Non-Judicial foreclosure processes
are available. Thus, the lenders can foreclose on deeds of trust/mortgages in
case of default using either of these processes.
- Foreclosures in the state can take place through in-court as also out-of-court
proceedings. However, the most common of these processes is taken care of by
a public trustee. It is managed out of court and takes around 6 months.
- Right to redemption is available in Colorado.
- The foreclosure process in the state is different from that of the
other states since the governor appoints a 'Public Trustee' for
each county in Colorado who has to act as an impartial party while handling
a power of sale clause.
- When there is no power of sale clause in the mortgage/deed of trust, the
judicial foreclosure is used. Upon declaration of a foreclosure by the court
the home is auctioned to the highest bidder.
- If a power of sale clause does exist in a mortgage/deed of trust then
the non-judicial foreclosure process is used. In this clause the borrower
pre-authorizes the sale of the property to pay off the balance on a loan
in case of default. In such deeds of trust/mortgages having the power of
sale, the power vested in the lender to sell the property can be executed
by the lender or the representative of the lender-the trustee. The regulations
for this kind of foreclosure are outlined in the 'Power of Sale Foreclosure
Guidelines'
