A candidate for a Colorado real estate broker license is studying for the state exam. She reads that Colorado's foreclosure process is 'non-judicial' but also involves a court hearing called the Rule 120 hearing. She is confused about how the process can be both non-judicial and involve a court. Which of the following best explains this apparent contradiction?
Correct Answer
D) The Rule 120 hearing is a limited, summary court review to confirm the lender's right to foreclose — it does not make the process judicial because it is not a full trial on the merits
Colorado's foreclosure is correctly classified as non-judicial because the lender does not need to file a lawsuit and obtain a court judgment to foreclose. The Rule 120 hearing under C.R.S. § 38-38-101 is a narrow, summary proceeding in which the court confirms only that the lender has the right to foreclose and that the deed of trust covers the property. It is not a full trial — the borrower cannot raise all defenses, and the court does not adjudicate the full merits of the dispute. The Public Trustee then conducts the sale administratively.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Predatory lending refers to unfair, deceptive, or abusive lending practices that impose unjustified terms on borrowers, often targeting vulnerable populations. It includes practices like excessive fees, inflated appraisals, and unnecessary refinancing.
RESPA is a federal law that requires lenders to provide borrowers with information about settlement costs, prohibits kickbacks and referral fees, and limits escrow account deposits. It applies to federally related mortgage loans.
The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
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