Foreclosure - Consumer Protection Bill

Tags: alaska, colorado, denver, Foreclosure, Foreclosure Listings, Foreclosures, foreclosures crisis, homes in colorado, mortgage
Posted in Foreclosures, General, June 1st, 2007 |

Five bills, introduced last year, are intended to stop the landslide loss of homes in Colorado.

Governor Bill Ritter is expected to sign a package of mortgage related bills. The aim is to protect consumers from the rising tsunami of foreclosures. Brother’s Redevelopment Inc. in Denver is in charge of the state’s hotline dealing with foreclosures. The line was set up last year responding to a deluge of calls from Colorado, which topped the country in foreclosure listings.

Ritter said that the step has been in the right direction. Now it was time to see to its execution keeping in mind the interests of the mortgage industry also.

The aim of Senate Bill 203 is to convert the state’s mortgage brokerage system from a registration to a licensing system. Hitherto only two states, Alaska and Colorado, did not require mortgage brokers to procure a licence.

However a warning has been given that this bill will not help those Colorado residents whose houses have already been included in foreclosure listings. It is aimed at preventing future such incidents by bringing to book questionable mortgage dealers mainly responsible for this foreclosure crisis. Many are of the same opinion.

Senator Peter Groff is optimistic that this bill will halt the foreclosure process and bring stability to the housing market. Unscrupulous brokers will be reined in. Groff had cosponsored another bill – House Bill 1322. It requires mortgage dealers to ‘act with good faith and fair dealing.’

The bills address some of the issues that had already been raised by The Denver Post last year. The series dug into the root cause for the state’s foreclosure pandemic.

The Colorado Mortgage Lenders Association supported most of the regulatory overhauling with some reservations. With the imposition of heavy regulation in the mortgage industry there was the possibility that consumers will face the difficulty of getting loans. It was to be noted that HB 1322 expected mortgage lenders to disclose their commissions. In keeping with this logic employees of private companies might also be compelled to disclose information of their wages and salary. Concerned with these points the Association is asking for clarification from the Director of Colorado Division of Real Estate.

Statistics for the first quarter of this year is alarming. The foreclosures in Colorado are 30% higher than the previous year which was in turn 31 % higher than 2005.

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