Lawmakers hear from homeowners, lenders on foreclosure problem | SummitDaily.com
YOUR AD HERE »

Lawmakers hear from homeowners, lenders on foreclosure problem

DENVER With Colorado’s foreclosures skyrocketing, Tayler and Justin Richardson testified Monday how their interest rate doubled in the six years they’ve had their loan, giving lawmakers a glimpse into how lending practices could put homeowners in trouble.After trying to get a written statement of the terms of their loan after it was “recast” with new terms, Household Finance told them last month that they missed a payment on the loan of their Aurora home. They’re now considered a month behind on their mortgage.Tayler Richardson said said she’s afraid such practices could lead to foreclosure for her and other homeowners.”I’m sure if we hadn’t made such a fuss we’d be far past that point,” Richardson said after testifying before state lawmakers.With Colorado leading the nation in the number of foreclosures, the House and Senate business committees also heard from a state regulator, the Attorney General, bankers, mortgage brokers and the Colorado Association of Realtors.A spokeswoman for HSBC, Household’s parent company, didn’t return a telephone call or e-mail seeking comment after business hours on the Richardsons’ complaint. An HSBC representative who attended the meeting talked to them and said he would look into the matter. He declined to comment.The Attorney General’s office is investigating lenders that have a pattern of complaints against them. But Jan Zavislan, deputy attorney general for consumer protection, said another problem is buyers who conspire to buy properties with inflated values. He said they never intend to live in the home and are only interested in walking away with the extra money from the loan.Others, like Bill Kidwell of the Colorado Association of Mortgage Brokers, said some buyers will end up with a loan that might be too much for them because they’re determined to get the house they’ve picked out.But Rep. Rosemary Marshall, D-Denver, said some brokers are leading customers into loans that don’t make sense for their situation…”They (buyers) are certainly not looking for someone to get them a loan that’s going to drive them out of that home,” she said.Erin Toll, the new director of the state’s real estate division, said most homebuyers are acting honestly and sees beefing up enforcement on a few bad real estate agents, appraisers and lenders as a possible way to cut down on foreclosures.In her first four months on the job, Toll said regulators have taken action against 12 real estate appraisers for inflating property values, with at least two hit with fines for over $50,000. Until now, Toll said the highest fine ever issued for an appraiser was $3,000.She said one appraiser was accused of inflating property values an average of 19 percent on a dozen properties over six months. Three of those properties ended up in foreclosure, she said.A $56,500 fine and a revocation of the appraiser’s license has been recommended and is still pending.She said more time is needed to see if these actions will help reduce the number of foreclosures but common sense says that homeowners stuck with an overvalued property are more likely to slide into foreclosure.”We should apply the standards we have and that should stop the problem, or at least make a dent in it,” she said.Toll said some appraisers feel pressure to increase values because real estate agents will make a higher commission on those sales. Greg Zadel of the Colorado Association of Realtors said appraisers are usually hired by lenders to keep them independent but added that any fraud should be combatted.


Support Local Journalism

Support Local Journalism

As a Summit Daily News reader, you make our work possible.

Now more than ever, your financial support is critical to help us keep our communities informed about the evolving coronavirus pandemic and the impact it is having on our residents and businesses. Every contribution, no matter the size, will make a difference.

Your donation will be used exclusively to support quality, local journalism.

For tax deductible donations, click here.
 

Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.

User Legend: iconModerator iconTrusted User