Lawmakers introduce measures targeting mortgage fraud
DENVER – Concerned over Colorado’s dubious title as the nation’s leader in the rate of home foreclosures, lawmakers introduced two measures Monday to crack down on fraud and regulate the industry.Sen. Peter Groff, D-Denver, said a new law requiring brokers to register isn’t working because most of the state’s 14,000 mortgage brokers are exempt.Under current law, only 4,500 mortgage brokers have registered.”We have to get a handle on the issue of foreclosure in this state,” Groff said.The bills would prohibit mortgage brokers from misleading borrowers, bar conflicts of interest including kickbacks for referrals, require mortgage brokers to review a borrower’s financial status, require disclosure about terms of a loan and give the Division of Real Estate the authority to fine or revoke the registration of brokers who break the law.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 people who conspire to buy properties with inflated values. He said some never intend to live in the homes and are only interested in walking away with the extra money from the loan.Rep. Rosemary Marshall, D-Denver, said previously that some brokers are leading customers into loans that don’t make sense for them and the state needed to beef up regulation.
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