Selling a Seller Financed Note in Colorado — CRS § 38-38-101, Public Trustee Foreclosure, and What Your Note Is Worth

Colorado is one of the most dynamic real estate markets in the country — and one of the most active for seller financing. Denver’s booming tech economy and population growth, Colorado Springs’ military concentration, Vail and Aspen’s resort property ecosystem, and the state’s vast agricultural eastern plains each produce distinct volumes of privately held seller financed notes. Colorado’s combination of strong appreciation, an outdoor lifestyle that attracts buyers from higher-cost coastal markets, and limited traditional financing in rural and resort areas makes owner financed notes a common tool across all 64 counties. Yet many Colorado note holders don’t realize they can convert that stream of payments into a lump sum. If you are wondering whether you can sell your Colorado deed of trust note for a lump sum, the short answer is yes — and this guide, prepared by a Colorado mortgage note buyer, walks through exactly how Colorado law shapes that process and what your note is worth on the secondary market today. Whether you plan to sell mortgage note payments soon or years from now, this matters. We buy mortgage notes nationwide, and it’s exactly the kind of thing we walk through with anyone asking, “How do I sell my mortgage note?”

What Types of Notes Can Be Sold in Colorado

Colorado is a deed of trust state, and its note market reflects the diversity of the state — from Front Range condos to mountain acreage to Eastern Plains farmland. As an established Colorado mortgage note buyer, Moxxie Asset Group regularly reviews and purchases the following types of Colorado paper:

• Deed of trust notes (owner financed) — Colorado is a deed of trust state. When a seller carries financing for a buyer, the resulting promissory note is secured by a deed of trust recorded against the property with the county clerk and recorder — not a traditional mortgage instrument. In Colorado, the document you will gather is a deed of trust.
• Owner financed installment notes — where the property seller acts as the lender and the buyer makes monthly payments directly, secured by a recorded deed of trust. These are common across the Denver metro, Colorado Springs, and resort mountain communities where buyers from out of state seek creative financing.
• Private mortgage notes — notes created between individuals, family members, or small investors outside of a traditional bank, secured by Colorado real estate ranging from single-family homes to ranch land in all 64 counties.
• Seller financed land contracts (contracts for deed) — less common than in Midwestern states but occasionally used in rural Colorado agricultural transactions and Eastern Plains properties.
• Inherited notes — notes received through an estate in which the beneficiary prefers a lump sum over managing a long-term payment collection relationship on a Colorado property they may not have a connection to.

Why Colorado Note Holders Decide to Sell

People choose to sell mortgage note payments for a wide range of personal and financial reasons, and Colorado note holders are no exception. Some of the most common situations we see include:

• Retirement — shifting from a slow monthly trickle of payments to a lump sum that funds retirement goals immediately, without waiting 20 years for the note to pay out in full.
• Relocation out of state — many Colorado note holders move away and prefer not to manage a note, track payments, or maintain a borrower relationship from a distance — especially on Denver metro or mountain community properties.
• Divorce — dividing a note between former spouses is often simpler when it is converted to cash rather than split as an ongoing income stream tied to a shared Colorado property.
• Inherited notes — heirs frequently prefer a lump sum over decades of payment collections on a seller financed note they didn’t originate and may not fully understand, particularly on rural ranch or agricultural land.
• Denver and Front Range investors cashing out — real estate investors who carried a note on a Denver metro property want to redeploy capital into a new acquisition. Colorado’s strong appreciation over the past decade has created favorable collateral conditions for cashing out seller financed notes.
• Mountain and resort community note holders — sellers who owner financed a Vail, Aspen, Telluride, or Summit County property often find that the note represents significant capital that could be more productively deployed elsewhere. Resort properties command strong collateral values, which can translate to competitive offers from note buyers.

How Colorado Law Affects Your Note’s Value

Colorado’s legal framework is one of the more seller-friendly in the country for note pricing, largely because of its efficient Public Trustee foreclosure process. Understanding how CRS § 38-38-101 and related statutes operate is essential for Colorado note holders who want to know how their paper is priced on the secondary market.

• Non-judicial Public Trustee foreclosure (CRS § 38-38-101 et seq.) — Colorado uses deeds of trust, and foreclosure is handled non-judicially through the county Public Trustee — a county official designated specifically to manage the foreclosure process. After a lender files a Notice of Election and Demand (NED) with the Public Trustee, the process moves on a defined statutory timeline. The trustee’s sale typically occurs 110–120 days after the NED is recorded. This is significantly faster than judicial foreclosure states like Florida (~18–24 months) or Michigan (12–18 months), and note buyers reward that efficiency in their pricing.
• Right of redemption (CRS § 38-38-302 et seq.) — Colorado law provides a statutory right of redemption after the Public Trustee sale. Junior lienholders and certain other parties may have redemption rights. For single-family residential properties without junior liens, the redemption window is generally short and predictable. Note buyers factor redemption risk into their pricing, but Colorado’s redemption framework is more predictable than some states, which supports more competitive offers on clean Colorado deed of trust paper.
• Rule 120 proceeding (CRS § 38-38-101) — before the trustee’s sale, Colorado requires a brief Rule 120 court hearing to confirm that the foreclosure is proper. This is not a full judicial trial — it is typically an uncontested administrative step — but it does add some time and modest procedural oversight to the process. In uncontested cases, Rule 120 adds little delay; contested cases can extend the timeline.
• Colorado Division of Real Estate (CDRE) and licensing — the Colorado Division of Real Estate oversees mortgage-related licensing under the Colorado Mortgage Loan Originator Licensing Act. Sellers who have financed more than 3 Colorado properties in a 12-month period may be subject to MLO licensing requirements under C.R.S. § 12-61-911 (now § 12-10-701 et seq. as renumbered). Professional note buyers and servicers operate within applicable Colorado regulatory frameworks.
• No state income tax on note sale proceeds for non-residents — Colorado does not impose a separate state withholding on note purchase proceeds paid to out-of-state sellers. Consult a tax professional regarding your specific situation — this is not tax advice.

The practical takeaway: Colorado’s Public Trustee foreclosure timeline under CRS § 38-38-101 is a meaningful advantage for Colorado note sellers. Compared to judicial foreclosure states, note buyers apply a smaller risk discount to Colorado paper — which means better offers for sellers with well-documented notes and clean payment history.

What Makes a Colorado Note Worth More

Not all Colorado mortgage notes trade at the same discount. Whether you want to sell a mortgage note in Denver, Colorado Springs, or rural counties, several factors can move the needle in your favor when a note buyer evaluates your paper:

• Payment seasoning — notes with 12 or more months of on-time payments are significantly more valuable than new notes with no payment history. The more payments documented, the stronger the evidence that the borrower is reliable, and the more competitive the offer you will receive from a Colorado mortgage note buyer.
• Low loan-to-value (LTV) — if the property is worth substantially more than the remaining note balance, the note carries less risk for the buyer. Colorado’s strong real estate appreciation — particularly in Denver metro, Colorado Springs, and resort communities — has created favorable LTV ratios on many seller financed notes originated in prior years.
• Strong Denver metro or Front Range collateral — notes secured by single-family residential properties in Denver, Aurora, Lakewood, Arvada, Westminster, or Colorado Springs are more liquid than rural ranch or agricultural notes. Urban Front Range collateral values are well-supported and easy for note buyers to verify.
• Interest rate on the note — seller financed notes often carry rates above current institutional rates. A higher note rate makes the payment stream more valuable and typically translates into a better offer when you sell a mortgage note on Colorado property. This is one of the most controllable factors at the time of origination.
• Clean borrower payment history — no missed or late payments. A spotless payment record is the single most important factor note holders can control before approaching a Colorado mortgage note buyer. Even one or two missed payments can reduce your offer significantly.
• Properly recorded deed of trust — the deed of trust must be recorded with the county clerk and recorder and show a first-lien position on the property. Note buyers verify recording status and lien position during due diligence. Second-lien notes are purchasable but carry higher risk and trade at deeper discounts.
• Down payment at origination — notes originated with a meaningful down payment (10% or more) demonstrate the borrower had real skin in the game at closing. Higher down payments correlate with lower default rates and typically produce better offers from note buyers.

The Selling Process

Selling your Colorado owner financed note is more straightforward than most note holders expect. Here is what the process looks like from start to close when you work with Moxxie Asset Group:

1. Free Note Review — Submit basic note details: property address, remaining balance, interest rate, monthly payment, and payment history. You don’t need every document to get started — our team works with what you have and responds within one business day. Visit /contact or call 954-466-7111.
2. Evaluation & Offer — Our team analyzes your note terms, payment history, property collateral, and Colorado market conditions to give you a transparent offer when you sell your Colorado mortgage note. We walk you through how we arrived at the number — no mystery pricing, no bait-and-switch.
3. Acceptance — Review the offer on your timeline with no pressure. If a full sale isn’t the right fit, a partial note purchase may be worth exploring — you sell a portion of the future payments for a lump sum and the note reverts to you after those payments are collected.
4. Due Diligence — We gather your deed of trust (Colorado is a deed of trust state), promissory note, payment records, title history, and property documentation. Remember to gather your mortgage or deed of trust (depending on your state) — Colorado uses deed of trust instruments. Due diligence typically takes one to two weeks.
5. Closing — We close through a licensed Colorado title or escrow company. Funds are wired directly to you. Total timeline is typically 3–5 weeks when all documents are received and title is clear.

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