Given the broad and troubling array of problems that have been revealed in mortgage foreclosures nationwide, a legislative effort to remedy Colorado’s loose process should have been one of those Kumbaya moments at the Capitol.
It should have passed with bipartisan support.
Instead, theseveral weeks ago after furious lobbying from bankers. Now, reform proponents plan to , and we think the substance of their proposal is right on.
Unfortunately, we cannot support putting what ought to be a state law into the state constitution no matter how much we agree with the essence of what they’re pitching. We wish initiative backers would have written the question in a way so that they’d ask voters to change law instead of asking them to amend the constitution.
At issue are so-called “no-doc” foreclosures, in which lenders can take possession of property without ever having to show they are entitled to do so. The ballot question that reform advocates have crafted, which is somewhat stronger than the failed legislation, would require those attempting to foreclosure to show documentation of the right to do so.
As we have said previously, it doesn’t seem like too much to ask.
Let’s keep in mind that Colorado recently got word it would in compensation from the settlement of a national case against five major lenders for mortgage servicing abuses.
In all, 49 states took part in the out-of-court settlement, intended to provide compensation for transgressions such as robo-signing — bank employees systematically signing off on documents without verifying the information in them.
Clearly, those sorts of abuses were happening here in Colorado and very well still could be.
During the legislative hearing on House Bill 1156, a former foreclosure lawyer testified how he signed what he said were thousands of documents saying a particular bank had the right to foreclose when his proof was merely an e-mail or an uncertified copy of loan paperwork.
“The law allowed me to foreclose on a property with just the stroke of my pen, whether this bank was the real party of interest or not,” Keith Gantenbein testified, according to a Denver .
The status quo is the result of a little-noticed change in foreclosure law in 2006. Before then, the law required banks to file original loan documents prior to foreclosure.
It’s unfortunate we find ourselves in the position of taking issue with the proposed ballot question because we are convinced of the need to require lenders to be more accountable.
However, Colorado’s constitution for this ballot measure idea.
That is why we have supported proposals over the years that would make citizen-initiated , and citizen-initiated changes to state law easier.
Apparently, it is too late to change the mortgage measure to make it a statutory change instead of a constitutional change, and that’s too bad because the measure embodies worthy public policy.
