Who it protects
All three must be true: (1) you live in the home as your main residence, (2) your mortgage is at least 30 days delinquent or in default, and (3) the buyer is an investor, not someone who'll live there. No foreclosure filing is needed.
Your right to cancel
You can cancel until the earlier of midnight on the third business day after you sign, or noon on the day before the foreclosure sale. The buyer must give you a Notice of Cancellation form.
Forms you should receive
- The Contract to Buy and Sell Real Estate (Colorado Foreclosure Protection Act version)
- Seller Warning – Equity Skimming
- Notice of Cancellation (original and a copy)
- Homeowner Warning Notice – Right to Cancel, in your main language
What investors can't do
- Pay you any money before closing
- Take your deed or a power of attorney before your cancel period ends
- Rent the home back to you with an option to buy it back (except under strict conditions)
- Make false or misleading statements about your home's value
- Make you waive your rights, like a jury trial or where a dispute is heard
The short sale exception
A true short sale, where the lender must approve and the contract includes the Colorado Real Estate Commission's Short Sale Addendum, doesn't need the special investor contract.
If something feels wrong
Violations can let a homeowner cancel the deal, and some carry criminal penalties. If you think you're dealing with a scam, contact the Colorado Attorney General's consumer protection office and talk to an attorney.
Source: Colorado Revised Statutes § 6-1-1101 and following (Colorado Foreclosure Protection Act). This is general information, not legal advice.
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