Colorado is the only state in the United States that uses a “Public Trustee” for foreclosures.  This system of managing foreclosures has been in place in Colorado since 1873. The same silver boom and then bust that helped create the legend of Molly Brown brought about the creation of the Public Trustee system in Colorado by the legislature hoping to help the miners who had lost their jobs in the silver crash.  Many other states use a “trustee” for the foreclosure process, but the trustee is typically an attorney or other representative of the lender.  In Colorado, the trustee is a public official who must follow statutory regulations.  Supporters of this system believe that this creates a more impartial and judicious approach to foreclosures.  Opponents of the system feel it is one more bureaucratic office that is susceptible to abuse by the holder of the office.

Appointing a Public Trustee

Some Public Trustees are appointed by the Governor. Recent criticism of certain Trustee’s actions led Governor Hickenlooper to call for their resignations and then he proceeded to replace them with new appointees. In other counties (those with lower volumes of foreclosures) the country Treasurer acts as the Public Trustee.

What are the duties of a Public Trustee?  The two primary tasks for the Trustee are to release a Deed of Trust when the loan has been paid off and to foreclose a Deed of Trust when the lender declares it in default.

Clarifies Process for Lenders and Borrowers

Since all Deeds of Trust are recorded in the Public Records by the Clerk and Recorder of each county it is of utmost importance that accurate records of their release be kept.  Without accurate records of the release our lending system would become dysfunctional very quickly.

The Public Trustee’s office also must strictly follow all of Colorado’s statues governing the foreclosure process.  They ensure impartiality and enforcement of these statues and protect borrowers from abuse of the process by lenders.  Each foreclosure property must be sold at a public auction on a specified day and the Public Trustee’s office conducts the auction and certifies its results.  The Public Trustee’s office(s) are supported solely by funds charged by the office for its services so it does not create a financial burden on the taxpayers.

[google_authorship], because of his more than 40 years of experience in funding hard money loans, is considered an authority on hard money or bridge financing.  He frequently speaks at meetings and conferences and writes articles on these subjects.