Tuesday, April 17, 2012

New Colorado law makes it easier for homeowners to collect foreclosure auction money due them

Homeowners who are legally entitled to excess funds from the public auction of their foreclosed properties can now claim the money years after they learn of it, according to a new law signed by Gov. John Hickenlooper today.

Until now, counties were allowed to keep — and often did — excess funds known as “overbid proceeds” if no one claimed them within five years of the foreclosure auction.

The law, the result of SB-30 by Sen. Cheri Jahn, D-Wheat Ridge, requires county public trustees who oversee the foreclosure process to give the unclaimed funds to the state treasurer.

The treasurer’s fund, known as the Great Colorado Payback, is held in perpetuity for its rightful owner or heir to claim at any time.

The legislation comes as a result of Denver Post reporting that last year exposed how many counties did little or nothing to track homeowners who were due money after their houses were foreclosed and liens paid. In some cases, county treasuries pocketed hundreds of thousands of dollars in large part because homeowners due the money weren’t notified or didn’t know they had money coming to them.

“This is really a great thing you’ve done,” Barry Gragert said to Jahn as he watched Hickenlooper sign the bill. “So many people who weren’t as lucky as me will be helped so much.”

Gragert had more than $50,000 coming to him but never knew it until The Post located him as part of its story. The retired veteran had lived in his car and was recovering from cataract surgery after his house was foreclosed.
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