The Colorado Division of Real Estate has completed its investigation of four loan-modification companies and closed the cases because it found no evidence they violated the state’s mortgage-broker law.
Companies exonerated include Creative Real Estate & Finance Inc. of Englewood; of Encino, Calif.; Carlsbad Real Estate Group LLC of Carlsbad, Calif.; and J&J Lending Corp. of Irvine, Calif.
The companies were among 17 subpoenaed by the division in December. Director Erin Toll at the time said her office was moving to protect homeowners from companies that might be charging upfront for help reworking mortgages and not making good on their promises. She also said some companies may not have been licensed to provide the services they offered.
But some of the companies involved have criticized the investigation as a “witch hunt” that went after innocent parties.
One of the four companies, Creative Real Estate & Finance, was referred to the Real Estate Broker Program for investigation of advertisements that appear to be from a government entity, Toll said.
Adriana Zuleta, owner of Creative Real Estate, said she believes the company was subpoenaed because it does a lot of short sales, or sales in which a home is purchased for less than what is owed on the mortgage.
She said the company has never done loan modifications. She said she thinks the problem with the advertising is the omission of the company’s phone number and added that the company never created an advertisement that looks like it came from the government.
The principal of another investigated company, Patrick McCormick of Comprehensive Lending Solutions in Littleton, asked to surrender his mortgage broker’s license because the division does not believe he is compliant, Toll said.
McCormick said he is willing to give up his license because he hasn’t used it in two years. His company locates distressed properties and negotiates short sales with lenders.
“I’m perfectly willing to surrender something I haven’t used in the last two years,” he said. “It’s a witch hunt.”
Documents from the remaining companies either have not been received or are still under review.
Toll said there will be more subpoenas issued.
“People have been complaining,” she said. “All the scams are starting to blend together. . . . They might call themselves foreclosure rescue, and they’re doing loan modifications or short sales. We’re starting to see this blurring of the lines.”
Margaret Jackson: 303-954-1473 or mjackson@denverpost.com
