Oakwood Holdings, LLC v. Mortgage Investments Enterprises, LLC

Petitioner Oakwood Holdings, LLC and respondent Mortgage Investments Enterprises LLC each claimed a right to the deed on a piece of foreclosed property. In 2014, Mortgage Investments purchased the property at a foreclosure sale. On or around the date of the foreclosure sale, Oakwood purchased junior liens on the property and then attempted to redeem pursuant to section 38-38-302, C.R.S. (2017). Mortgage Investments, however, did not provide redemption figures and instead, acting under a limited power of attorney granted by the prior property owner, attempted to pay off the amount due to Oakwood under the junior liens. Oakwood, however, refused the payment. Mortgage Investments then filed for a declaratory judgment action, seeking a declaration that its payoffs were valid and that Oakwood was not entitled to redeem the property. The parties ultimately filed cross-motions for summary judgment, the district court granted summary judgment for Oakwood, Mortgage Investments appealed, and in a unanimous, published opinion, a division of the court of appeals reversed. The Colorado Supreme Court reversed the appellate court’s judgment, concluding that under the plain language of the applicable redemption statutes, a junior lienor who complied with its obligations under section 38-38-302 by timely filing its notice of intent to redeem is entitled to redeem, and at that point, it has no duty to accept a tendered lien payoff from a certificate of purchase holder. Although a debtor-owner is sometimes entitled to cure, the statute is clear that he or she must do so before the foreclosure sale is complete, and Mortgage Investments gained no additional rights by obtaining the limited power of attorney from the debtor-prior owner after the sale in this case. Accordingly, once Oakwood complied with the statutory requirements to redeem, it was permitted to do so and had no obligation to accept what amounted to cure funds tendered by Mortgage Investments on behalf of the debtor-prior owner. View "Oakwood Holdings, LLC v. Mortgage Investments Enterprises, LLC" on Justia Law