The dramatic rise in the number of foreclosures filed in Colorado during the last five years has led to increased scrutiny of both the foreclosure laws and the actions of Colorado’s public trustees. As detailed in an April 4 post in this blog, proponents of ballot Initiative 84 had sought to correct perceived problems in the state’s foreclosure laws with an amendment to the Colorado Constitution. A recent article in The Denver Post indicates that these efforts are being redirected to effect legislative reform instead. In addition, the resignation on July 10 of nine of the public trustees appointed by Governor Hickenlooper and the retirement of the tenth followed two days after allegations by The Denver Post that some trustees had used public funds to benefit themselves and their employees. While public trustees for the majority of Colorado’s 64 counties are elected, ten trustees in some of the most populous counties, including Adams, Arapahoe, Boulder, Douglas, El Paso, Jefferson, Larimer, Mesa, Pueblo and Weld Counties, are appointed by the governor. The appointed trustees operate with greater autonomy and less oversight of how they spend millions of dollars in foreclosure fees collected by their offices than those trustees who are elected and whose budgets and expenditures must be approved by county commissioners. The governor’s office has indicated that the positions will be filled by mid-August, though Representative Ray Scott, R-Grand Junction, who sponsored legislation passed in May intended to rein in the authority of public trustees, has asked the governor not to fill the positions but to wait for the General Assembly to pass legislation in January to overhaul the foreclosure process and possibly eliminate the office of the public trustee in its entirety.
Established in 1894 when Colorado’s economy collapsed upon the federal government’s switch to the gold standard from silver, Colorado’s unique public trustee system was designed to provide a fair venue that would protect the interests of both lenders and property owners. While some have argued that recent changes in the laws have compromised the rights of property owners, others feel that the current process works fine and that calls to eliminate the public trustee’s office entirely would be throwing the baby out with the bath water. The resigning public trustees are each eligible to re-apply for their posts and several have already indicated their intent to do so, including El Paso County Public Trustee Tom Mowle, whom our office has found to be one of the most knowledgeable trustees with one of the best-run offices. We will be interested to see the actions that will be taken by the governor and the legislature, and how those actions will help Colorado address an expected new wave of foreclosures, if one comes.