DENVER – Attorney General John Suthers announced today the findings of his Mortgage and Foreclosure Fraud Task Force formed in July to address the rise in mortgage and foreclosure fraud throughout Colorado.
“Earlier this year, the FBI identified Colorado as one of the top ten mortgage fraud ‘hot spots’ in the country,” said Suthers. “This is unacceptable and thanks to the work of the Mortgage and Foreclosure Fraud Task Force, we are making efforts to remove Colorado from this list.”
Among the legislative proposals, the Mortgage and Foreclosure Fraud Task Force recommended legislation requiring foreclosure consultants and equity investors to have written contracts with homeowners. The Task Force also recommended that these written contracts describe in detail the services to be provided and the terms and conditions of any transfer of ownership in the property in foreclosure. Finally, the Task Force recommended that homeowners be given written notice of their right to rescind or cancel these contracts.
Under the recommended legislation, violations can be prosecuted under the Colorado Consumer Protection Act, and certain violations will be misdemeanors punishable by one year in jail and/or a fine of $25,000.
Rep. Tom Massey (R-Chaffee) and Sen. Jennifer Veiga (D-Adams) will sponsor the legislation next session.
“Mortgage and foreclosure fraud is an increasing consumer problem here in Colorado,” said Rep. Massey who also works as a realtor. “I’m pleased Attorney General Suthers is taking a closer look at what can be done to curb this growing wave of consumer fraud.”
In addition to the legislative proposals, the Mortgage and Foreclosure Task Force formed a subcommittee to address public awareness and outreach. Among their efforts to help educate the public of the rise of mortgage and foreclosure fraud, the group designed a brochure to be used in public trustee offices throughout the state.
The educational brochure features helpful phone numbers and general information on foreclosures as well as tips on what to do to avoid becoming a victim of a foreclosure scam.
“There are numerous scams that cheat the consumer or the lender out of the home’s true value,” said Suthers. “This brochure is one way we can give consumers the knowledge to avoid schemes like foreclosure rescue scams that become so onerous the homeowner often losses their primary asset.”
Attorney General Suthers also noted that he would be visiting cities in Colorado early next year to address mortgage and foreclosure fraud. To date, Attorney General Suthers has held public forums in Northern Colorado and Grand Junction to discuss mortgage fraud and other local concerns.