Banks’ right to foreclose in dispute

The bank foreclosing on an Aurora woman challenging the constitutionality of Colorado’s foreclosure laws did not formally own the right to take her house until a month after it filed its case to do so, public real-estate records reviewed by The Denver Post show.

Although a lawyer representing US Bank signed a statement asserting his client had the right to foreclose on Lisa Kay Brumfiel when he filed the case with the Arapahoe County public trustee in September 2011, the assignment of her deed of trust — the document that legally conveys that right — didn’t occur until a month later.

The deed-of-trust assignment was filed with the Arapahoe County recorder, where transfers in mortgage ownership used to be filed as a matter of routine. The practice stopped years ago when banks found a way to avoid the costly expense associated with filing documents publicly.

And Brumfiel has company. The Post found several instances in a random check of county foreclosure cases in Colorado where lenders did not formally have ownership to a deed of trust until weeks or months after beginning the process to take the house.

“It’s a lot more common than you can ever imagine,” said Keith Gantenbein, an attorney in private practice who once signed those same certifications while working for the state’s largest foreclosure law firm, Castle Stawiarski, now called the Castle Law Group.

“Foreclosure cases are frequently filed on the promise that a bank has the note, but their interest in the deed of trust, which cannot be separated, doesn’t happen until later,” he said. “It’s awful.”

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