Colorado Moves Forward with Legislation to Prevent Fraudulent Foreclosures

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Editor’s Comment: 

Once upon a time it was a simple thing. If you sued someone, you had to say why, plead facts that supported the relief you wanted, and then demand the relief. Today it is considered nearly revolutionary to require foreclosers to prove the loan, prove the facts supporting foreclosures, using real evidence and not suppositions. As Colorado moves closer to Nevada’s law there is ample reason to hope that foreclosures will plummet there too. Isn’t it odd though that mediated settlements are not rising substantially either? 

We can only assume that there is something the Banks and servicers are not telling the pensioners who rely upon funds that were heavily invested in the bogus mortgage bonds. Could it be that if the pensioners collectively and the homeowners collectively got together and compared notes they would discover the problem: that when their fund manager put up the money for loans, there were no loans? Or that the investment bank removed 20%–40% of the funds and converted them to fees and profits leaving only a fraction of the money of the pensioners to fund mortgages?

Pensioners and homeowners have more in common than they might realize. In fact they might even be the same person.  Someone whose pension funds are going down because of losses on mortgage bonds in their pension fund and someone who is losing their house in foreclosure because of the decrease in pension income and trickery used by the Banks in securing their signature in bogus loan deals. Many pensioners are going to hear soon that the benefits they were expecting must be reduced because of chicanery on Wall Street. Some of those same people are angry at the thought of providing relief to homeowners who were also tricked into these bogus loan deals. Now that you see the effect, are still sure that borrowers in distress are deadbeats?

Foreclosure: Initiative 84 changes language, pushes for signatures

By Kelsey Whipple

Initiative 84, a proposed constitutional amendment that would require lenders to prove ownership of property before foreclosing on it, has passed another hurdle in its move toward legalization. On Friday, proponents and opponents met before the state title board to discuss its language, which made it through relatively unchanged. The next step, however, might prove the hardest.

Before the potential amendment makes it to a statewide ballot, the Colorado Progressive Coalition, the body heading up its support, must collect a minimum of 87,000 signatures — which could cost $200,000 or more, CPC economic justice director Corrine Fowler says. Now that the effort’s language has been cemented, the coalition is gathering volunteers and paid representatives to launch its signature drive.

Initiative 84, which was created after House Bill 1156, a similar foreclosure measure, died in committee before making it to the floor, seeks to reverse 2006 legislation that changed the standards for legally processing Colorado foreclosures. Since that year, it has been legal for lawyers to sign a “statement of qualified holder,” which indicates ownership without a pattern of proof, and it is no longer mandatory to show a paperwork chain.

If approved, the amendment would require financial institutions to verify ownership of any property through a county note or a certified copy presented during the court stage of a foreclosure.

So far, the language has come under fire from a handful of financial institutions, and while both sides made arguments regarding the initiative’s appropriateness on Friday, most were rejected because they did not apply to title board proceedings. In the meantime, the board denied efforts to stage a rehearing to slow down the initiative.

Fowler says the CPC is satisfied with the slight change in wording, which now reads, “An amendment to the Colorado Constitution changing the existing evidentiary requirements for foreclosure of real property and in connection there with requiring the evidence be filed to sufficiently establish a party’s right to enforce a valid recorded security interest prior to the foreclosure of any real property.”

The central change here is that now sufficient evidence is required, rather than “complete” evidence. The difference could become a significant one at court in the future.

“Special interests like the Colorado Bankers Association won’t be able to come back and change it in future years,” Fowler told Westword. “This is going to affect the bottom line of the lawyers and the bankers, and we know that and don’t take this lightly. We believe that the foreclosure crisis is the biggest issue our national economy is facing.”


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