State’s Supreme Court Schedules Public Hearing over Changes in Foreclosure Rule

by San Antonio Attorney

The Supreme Court in Colorado is mulling over changes to its rules in the courtroom that would increase the consumers’ chance of saving their homes from foreclosure.

The a public court hearing was scheduled to tackle modifications to the Rule 120 procedure in the state of Colorado, which provides homeowners the chance to dispute a foreclosure by coming to court, but is often misunderstood and hardly ever used.

The highest priority of many proposed modifications would guarantee a homeowner is in fact heard by a court judge.  Under the current process, a homeowner is required to give an answer within a specified date after receiving a notification of the Rule 120 court hearing.  Failure to do so would forfeit the homeowner’s right to be heard in court, and the foreclosure order is often approved automatically — even though the homeowner appears in court at the earlier scheduled time.

Additional changes would also be made in a homeowner’s right to ask for proof that a financial institution or bank could legally foreclose on a home.  That would change ongoing practice, in which a bank’s lawyer can confirm using only a signature — without concrete evidence — that it has that legal right.

Critics constantly point to paperwork inconsistencies in which the financial institution that lent the mortgage fund to a homeowner wasn’t the entity foreclosing the property.  Banks have been putting home mortgages under the Mortgage Electronic Registration System, to be able to track ensuing changes in the ownership of mortgage without spending a lot of money in recording every single one of them at local counties.

The real paperwork reflecting the change in rights, however, is hardly ever shown in court.  Bankers assert a legal representative’s word should be acceptable because they will face sanctions if they deliberately conceal the truth.

For many years, case law has provided consumers the legal right to demand for proof, but they must do so in accordance to the rules and a small number of judges acted on it.  In addition, consumers who are about to lose their home in foreclosure frequently cannot afford to pay a lawyer so they are unlikely to figure out what to do on their own.

For the time being, a Rule 120 court hearing only takes into account a couple of things: whether a debt is actually owed and whether the property can be shielded from foreclosure due to his or her active service in the military.

 

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