Colorado has formed a multi-agency task force to crack down on people who prey on the increasing number of families facing foreclosure on their homes.
“One of the things we want to do is get these people out of business,” Colorado Attorney General John Suthers said at a news conference Thursday. “It means … incapacitating people committing criminal conduct.”
The task force will examine methods for sharing resources so multijurisdictional prosecutions of fraud can take place.
It will also educate the public and make suggestions to the legislature so greater protection can be provided.
Suthers, surrounded by county officials and law enforcement agents, identified the culprits as unscrupulous “foreclosure consultants,” mortgage lenders and brokers who foist a variety of schemes on people facing foreclosure.
Last year, he said, a record 12,000 people in Colorado had their homes enter foreclosure.
They are inundated with solicitations from “vultures” promising debt relief, credit repair and escape from pending foreclosure.
“Unwitting homeowners may be convinced that they should hire a foreclosure consultant who does little or nothing to really assist them,” Suthers said. “Most concerning, homeowners are often persuaded to transfer ownership of their homes … to a foreclosure consultant … in exchange for a promise that they can stay in their homes, make lower rent payments and ultimately repurchase the home at market value.”
But what often happens, he added, is that homeowners are unable to make the new payments and are evicted, costing them the equity in their homes.
Suthers said many of the solicitations are made door-to-door or by phone.
Some frequent scams include loan packing, whereby homebuyers are not told about exorbitant fees rolled into their loans, or loan flipping, in which buyers are persuaded to repeatedly refinance to obtain better terms only to have their equity used up on repeated closing costs and commissions.
Angela Dazlich, Larimer County public trustee, said she sees suspicious foreclosures daily.
“I see it repeatedly, and I see repeat offenders,” she said.
Officials say there are sophisticated operators working the Front Range and urban counties but that some are branching into other parts of the state.
Staff writer Howard Pankratz can be reached at 303-820-1939 or hpankratz@denverpost.com.
