El Paso County Public Trustee and Foreclosures
I work as the Public Trustee for El Paso County.
My Responsibilities as Public Trustee
- I protect the rights of lenders and borrowers when property is in foreclosure. More specifically, my deputies and I make sure the banks are following the law if they are going to foreclose on someone’s home, land, or business.
- We notify property owners and other interested parties of their rights, process payments to “cure” foreclosure, and far too often these days, sell property at public auction.
- We protect the rights of lenders to foreclose on the property that was promised in case of default, but lenders generally have lawyers who look after their rights. Usually, no one but us looks after the borrower’s property rights.
How Foreclosures Work Elsewhere
Colorado is the only state that assigns these duties to a public administrator. In other states, foreclosure is either handled by the courts (which can be difficult and expensive for borrowers) or by a private trustee who works directly for the banks (rather than the public). This is a better system: we are easily accessible to the public, who can contact us for good honest information about their situation and options.
El Paso County and Foreclosures
I stepped into this post in February 2008, the day after I retired from the Air Force and just as the number of foreclosures was accelerating to the highest levels in county history. While it looks like things will be “better” in 2010 than last year, they are not “good.” Over $500 million worth of property was sold at auction last year, and this year it will probably be another $400 million. While some of the foreclosure problems are rooted in national trends, we have been improving less quickly than Metro Denver has this year.
The level of responsibility in this office is very high. We are dealing with people’s homes and businesses, and respect their rights while also recognizing the lender’s rights during default. Last year, we were accountable for about $50 million in payments that came into this office and then was paid out to the correct party.
The Public Trustee’s Office and the Management of Funds
Our office is fully funded by statutory fees paid, almost always by banks. Typically, we receive about $1.3 Million in fees each year. From that money, we pay our operating expenses, and whatever is left over at the end of the year is transferred to the El Paso County General Fund. Last year, we sent about $325K to the county, and this year anticipate sending about $800K. Later posts will explain exactly how we have become so efficient — the El Paso County Public Trustee’s office is a “money-making machine” according to the Gazette.
This is a lot more net earned revenue than the office sent in previous years. If you go back and look at the years before I became Public Trustee, at first it looks like the office generated more excess for the county than it does now. This is misleading, because the County used to provide nearly $500K in “free” services to the Public Trustee — the county’s net receipts was much less than the gross reported. We now pay for those services, which puts us on a sound footing in case the County decides not to provide them in the future. Our current transfers to the County have already included those costs, so the net is the same as the gross.
The Public Trustee’s revenues were also artificially inflated during that time. Colorado law specifies the fees we must collect, and allows us to pass money we pay to third parties (such as for publications) back to the banks. From 2002-2008, the Public Trustee added a $57 fee to every foreclosure to cover mailing, printing, and copying — about $50 more than was justified by the actual costs.
Once we back out all of those hidden subsidies and unearned revenue, we can properly compare the net sent to El Paso County. Prior to my arrival at the beginning of 2008, we annually sent only a bit over $200K (net) to the County. Starting in 2008, that amount has increased every year, with an ever-higher percentage of our earned fees ending up with El Paso County. That money offsets calls for higher taxes, providing more money for fixing roads or funding the sheriff.
That’s what I do as Public Trustee — I make sure that banks follow the law, provide honest information to borrowers in foreclosure, have a fiduciary responsibility over a LOT of money flowing in and out of the office, and do my best to hold down costs for the general benefit of El Paso County.
But this is not ALL I do as Public Trustee. The next few posts will talk about the service we provide.
