A district judge has upheld the Colorado Division of Real Estate’s right to subpoena the bank records of loan originators it’s investigating.
The decision is the result of a lawsuit filed in September against the division by Acclaim Mortgage and its owner, Daniel Gordon. Judge John Madden had dismissed a temporary restraining order against the division but asked it to cease its investigation until a hearing Monday.
Gordon’s attorney, Wayne Vaden, could not be reached for comment.
The court found that “bank records of the mortgage loan originator and his company would reveal if any such funds were . . . distributed to unlicensed individuals in amounts indicating that such individual was being paid for originating the loan. It is possible that methods could be utilized to mask such transactions, such as arranging for side payments by a borrower, making multiple payments to the individual in smaller amounts, or making payments to intermediaries.”
Erin Toll, director of the Division of Real Estate, said the ruling is a big victory for the department. “It is not our ordinary course of business to look at bank records, unless there is inconsistent information from closing documents,” she said. “The only way we can figure out how to catch these people is bank records.”
The opinion also is significant for other state agencies that use bank subpoenas in their investigations, including the Division of Insurance and the Division of Civil Rights.
Margaret Jackson: 303-954-1473 or mjackson@denverpost.com
