Tuesday
09Jan
Colorado AG announces proposed new legislation to combat mortgage fraud
Tuesday, January 9, 2007 at 02:23PM 
On January 8, 2007 Colorado Attorney General John Suthers (pictured left) announced a key legislative proposal that will target appraisal fraud and mortgage brokers who engage in deceptive trade practices. “Last year, thanks to the efforts of the Attorney General’s Mortgage Fraud Task Force, new consumer protections were adopted for families facing foreclosure and stiffer penalties were enacted to address mortgage fraud,” said Suthers. “This year, we are taking further steps to protect homeowners. The legislation we are announcing today targets the growing problem of appraisal fraud, and adds additional penalties against mortgage brokers who engage in deceptive practices.”
Under the recommended legislation, the Division of Real Estate will have the authority to deny or revoke the registration of a mortgage broker who has been prohibited by any court from engaging in deceptive conduct relating to brokering a mortgage loan.
Act. Rep. Tom Massey (R-Chaffee) and Sen. Jennifer Veiga (D-Denver) will sponsor the legislation this session.
In July 2005, General Suthers formed a Mortgage and Foreclosure Fraud Task Force. The Task Force’s recommendations subsequently led to SB-71 (click here to read it), signed by Gov. Owens last May, which requires that all transactions between homeowners and foreclosure consultants or equity purchasers be in writing, prohibits consultants who provide advice or assistance from acquiring any interest in the homeowner’s property, and calls for a three-day “cooling off” period.
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