Colorado Department of Law — Annual Report 2009
on a national level in combating mortgage fraud. Staff and the Attorney General work on two federal-state task forces that are designed to enforce laws that will protect fair lending and prevent mortgage scams, the State-Federal Task Force on Mortgage Enforcement and the Mortgage Fraud Working Group of the recently formed Financial Fraud Enforcement Task Force. This office also led a training session in April 2009 for the offices of other state attorneys general concerning enforcement actions that our offices can undertake to combat mortgage fraud.
Also in 2009:
This office has also continued to enforce Colorado’s mortgage fraud laws. It reached a $100,000 settlement with a local mortgage brokerage firm that used deceptive direct-mail solicitations designed to appear as though they were coming from federal lending authorities.
Unit attorneys sued a brokerage firm that placed numerous borrowers in the Cañon City area into loans that they could not afford.
We settled another lawsuit against a loan originator who ran numerous false advertisements in The Denver Post and Rocky Mountain News. The settlement bars the broker from originating loans in Colorado and required him to pay $7,887 in restitution to an elderly couple that took out an option ARM loan after responding to an advertisement.
In February 2009, this office joined the nationwide settlement with Countrywide, which was acquired by Bank of America in 2008. This settlement resulted from an investigation that was focused on Countrywide’s deceptive marketing and originating of exotic subprime and option ARM loans that ultimately proved unaffordable to borrowers. Under this settlement, Bank
of America paid $4.4 million to the state. Approximately one half of this amount has been paid as restitution to Colorado borrowers who lost their homes as a result of these risky loans with Countrywide. The remainder has been reserved for future losses by borrowers and for foreclosure- prevention efforts.
Foreclosure Prevention This office continues to work with the State Foreclosure Prevention Working Group in order to prevent foreclosures. The State Foreclosure Prevention Working Group is a multistate group composed of the offices of sixteen attorneys general and three state banking agencies. This group is working with loan servicing companies to modify loans where it makes economic sense to keep the borrower in the home rather than let it fall into foreclosure. Since the Home Affordable Modification Program was announced by the Department of Treasury in early 2009, this working group has remained in constant contact with the Treasury Department in order to improve upon the modifications that are being offered to borrowers under this new plan.
Antitrust In 2009, this office launched an educational effort in order to identify and prevent bid rigging federal, state and local contracts. This office has designed a presentation for government procurement officials to use to identify signs of possible bid rigging. Several presentations have been made to these officials across the state. It is hoped that this education effort will prevent inflated bids on government contracts, thereby saving government dollars in these difficult economic times.