A Deed of Trust is a three party agreement (borrower, trustee, and lender). A promissory note is used as express evidence of the debt. When a loan is being paid off, it is also customary that the Lender issue and record a Release of Deed of Trust to discharge its collateral on that same real estate. State statute governs how a Deed of Trust can be released “of record” through the Public Trustee’s office. A “Qualified Holder” can present a Release of Deed of Trust without producing evidence of the debt (the original promissory note). What if it is not a “Qualified Holder” and you can’t find the Original Promissory Note? Then you need a Colorado Lost Trust Deed Bond to obtain the release of the trust deed.
To summarize, if a note holder, (party that made the loan on the property) is not a “qualified holder” the original promissory note must be presented to record the release of the deed of trust. If this promissory note is not available, has been lost or destroyed, a surety bond will be required before the release can be recorded. As such, it is really not a lost trust deed bond as much as a lost promissory note surety bond.
US Banks, similar institutions, and the federal government can submit and obtain a Release of Deed of Trust through the PT’s office without the need to produce the original Promissory Note when recording the Release with the county Clerk and Recorder’s Office. A none qualified note holder is generally a private party note. A Non-Qualified Holder must produce the original promissory note when processing a Release of Deed
of Trust, a copy will not satisfy this regulatory requirement. As required by C.R.S. § 38-39-102, the holder ““shall deliver to the public trustee a corporate surety bond in an amount equal to one and one-half times the original principal amount recited in the deed of trust”. this surety bond is the Colorado Lost Trust Deed Bond. As stated above, the Colorado Lost Trust Deed bond amount is equal to one and a half times the amount of the trust deed that is to be released.
Complete our easy to use, online application. Upload or fax over the preliminary title report, and a friendly agent will be in touch with you within 1 business day. Each bond is different and some may require additional underwriting depending on the particular circumstances. Surety1 has been providing surety bonds in Colorado since 2003.