Redemption periods after auctions.?

Question

Have been looking at online ebooks to get educated about buying at foreclosure auctions, but struggle with some of the State law differences. I live in Colorado. Can some one tell me in plain english the basic difference judicial vs non judicial, what the redemption period means to the winning bidder, and does the original owner get a chance to redeem his property? Although I can't see how he could under the circumstances.

Answer 1

Hi Maggie,
I am in Florida but can give my input which you may find rounds off what everyone else tells you.
Judicial means a Court action.
Non-judicial is also known as the "power of sale" because a clause in the deed of trust preauthorises the lender to sell off the property in default to pay what is owed.
I thought in Colorado Judicials were not common but I see that in an another answer we are told that Colorado is a NJ state only.
Redemption, my understanding is that prior to June 2006 the right to redeem (75 days) was allowed to both the borrower and the junior lienholders, and then the state law was changed to eliminate the right for the borrower.
A redemption period means that the new owner can take title subject to, but will not be able to get title insurance, and usually can't get any financing, and no repairs/alterations undertaken. On day 76, given no redemption right exercised the property is yours.

Answer 2

A redemption period is exactly what you do not want to think it is. In most states, there is a period AFTER the sheriff's sale (varies from state to state) during which the current property owner can pay the charges which forced the foreclosure action and retain ownership of the property. Any winning auction bidder is informed that the property has been redeemed and his downpayment is refunded.

The difference between a judicial and non-judicial foreclosure is that a judicial one requires legal and court action to commence and complete. A non-judicial foreclosure occurs when the original mortgage contract contains specific language allowing foreclosure when terms of the contract are not honored by the borrower. Some states allow non-judicial and others do not, and yet others allow them with certain restrictions and requirements.

Answer 3

I am a Colorado Realtor. Colorado is a Non-Judicial state, which means our foreclosures are processed through a public trustee, not a court for our foreclosures, and effective July 1, there will be no redemption period on foreclosures due to a new state statute.