- November 04, 2002
- All Issuing Offices in Colorado
- Legislative Summary 2002
The following is a summary of bills enacted by the 2002 Colorado Legislature and subsequently signed into law by Governor Owens which have some impact, either directly or indirectly, on the business of title insurance in Colorado. Unless otherwise noted the effective date of each of these bills is July 1, 2002.
Senate Bill 84 (Concerning Real Property subject to judicial process)
This bill clarified certain issues relative to judgment liens and the processes and procedures employed in conjunction therewith. These clarifications included issues relating to foreign judgments, federal court judgments, and newly formed and annexed counties. The law also contains clarification of the effect and procedure relative to revival of a judgment. In addition the law provides clarification that recorded Lis Pendens will be constructive notice only if the action is filed in a state court or Colorado Federal District Court. However, a recent Colorado Supreme Court Case, Kerns vs. Kerns, appears to allow for the opposite. In this case the court found the recording of a Lis Pendens for an out-of-state court action was effective when recorded in Colorado. We are awaiting clarification on these conflicting positions. Until clarification is obtained you must require the disposition of any Lis Pendens whether filed in the State of Colorado or in an out-of state court.
Senate Bill 161 (Concerning the Modification of Procedures for the Foreclosure of Deeds of Trust)
Senate Bill 161 makes some significant changes to current public trustee foreclosure procedures that are currently codified mainly in C.R.S. Section 38-38-101 et seq. While several of the revisions are technical matters involving internal operation of public trustee's offices, there are many substantive changes that you should be aware of:
- Certain types of lenders may now undertake "paperless" foreclosures, where they need not provide the original promissory note or bond
- Changes the deadline from 10 to 20 days after recording of the Notice of Election and Demand for time which the public trustee has to send out the Notice of Right to Cure or Redeem
- Owner's Notice of Intent to Cure must now be filed with the public trustee fifteen (15) days prior to the sale date
- Owner's Notice of Intent to Redeem must now be filed with the public trustee fifteen (15) days prior to the expiration of the redemption period
- Effects minor changes to cure procedures
- Effects changes regarding redemption procedures
- Requires that post-foreclosure liens upon the property be recorded at least fifteen (15) days prior to the end of the owner's redemption period
- Provides that as to post-foreclosure liens, only the three most senior liens recorded after the Notice of Election and Demand has been recorded may exercise lien holder's redemption rights
This Bill also adds a new statutory section C.R.S. 38-35-124.5 relating to the accuracy of written payoff statements. This statute states that any entity providing closing services for real estate transactions, to whom a payoff statement is addressed, shall be entitled to reasonably rely on the amounts set forth in such payoff statement for the time frame set forth in the statement, and shall not be liable to the lender for any omitted amounts, unless a written amendment is received by the title company prior to the closing.
A more complete summary or a copy of the Bill is available upon request.
Senate Bill 230 (Concerning the Designation of the County in which Specified Actions Related to the Activities of the Public Trustee May Occur )
This bill was necessary because of the creation of the new County of Broomfield. The bill specifies that the public trustee of the county in which the property was located at the time of execution of the documents or performing other acts required of a public trustee, or at the time the deed of trust was recorded, is the proper public trustee to deal with all issues affecting the deed of trust, and that all such documents may be recorded in either of these counties.
House Bill 1111 (Concerning the terms of future advances secured by Mortgages)
The bill addresses the future advance provisions of mortgages and Deeds of Trust. Provides that if a security instrument articulates a maximum principal amount and sets forth that certain portions of said principal may either be obligatory or optional future advances, the stated principal shall occupy the same priority "as if such total maximum principal amount had been fully disbursed on or before the date such mortgage was released".
House Bill 1119 (Concerning Electronic Documents)
The bill gives clerks the authority that they need to accept, maintain and work with electronic documents. Also requires a clerk to collect a $1 surcharge for each electronic filing received until July 1, 2009, of which half shall be credited to the clerk and recorder electronic filing technology fund. Creates a "notary token" which empowers notaries to attest electronic records, without use of a seal. The newly increased recording fees became effective September 1, 2002.
House Bill 1259 (Concerning Protection of consumer's Home Ownership Equity)
Creates additional protections regarding covered loans, including limitation on balloon payments, accelerations of indebtedness, negative amortization, increased interest rates after default, mandatory arbitration clauses, prepayment penalties, the use of loan proceeds to pay home improvement contractors, financing of credit insurance, recommendations to default on existing loans and charges a fee for providing a credit balance. Preempts local law attempting to regulate lending activities subject to the act.
House Bill 1326 (Concerning Adoption of the Uniform Electronic Transactions Act)
The bill enacts the Uniform Electronic Transactions Act to govern transactions between parties that have agreed to conduct business by electronic means. The bill requires that electronic transactions conform with the legal requirements for other transactions where necessary, but also specifies that an electronic record or signature satisfies the legal requirement for a written record or signature. The bill request the Secretary of State to determine whether and to the extent to which the State will create, retain, send and accept electronic records.
House Bill 1357 (Concerning Modification of the Requirements Relating to Notification of Surface Development to Owners of Severed Mineral Estates)
The bill adds certified professional landmen to the list of those who can prepare reports on mineral ownership. It exempts utility transmission lines from the definition of developments that fall under the notification law. It also clarifies that if a developer files more than one application for development with a local government for the same new surface development, only one notification to each mineral owner is required (for the initial public hearing for the initial development). Excludes zoning and rezoning, applications for change of use for an existing structure, boundary adjustments, and applications for a lot site plan from the list of processes that require mineral owner notification.
This memorandum is intended to provide general information on new statutes affecting title insurance in Colorado. As additional issues or questions arise regarding specific procedures to be followed in each case, please don't hesitate to contact your Stewart Title Guaranty Company underwriting personnel.
THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.