Here’s an interesting look at the problems with enforcement of mortgage fraud laws in Colorado.
When Denver real estate attorney Ronald Thompson contacts the Colorado attorney general’s office about mortgage fraud or real estate scams, he knows his chances of getting help are slim to none.
“It is not the sort of thing where you can wait weeks or keep calling back to get somebody’s attention,” said Thompson, who has represented clients in real estate fraud cases. “Things are happening. Foreclosures are proceeding. Evictions are going on.”
Thompson said he almost always ends up passing the message along to clients that he gets from law enforcement – the case isn’t big enough.
“My experience in referring people to law enforcement agencies is that it is a waste of time,” he said. “A lot of this is very sophisticated and fast moving, and it is hard for the attorney general’s office to keep up with it.”
I wonder how the Arizona Attorney General is doing on mortgage fraud?
[In Colorado] Existing consumer protection laws give the attorney general the power to take on mortgage brokers who advertised home loans with low interest rates that quickly got jacked up in a classic bait-and-switch scheme, said Denver real estate attorney John Head.
Meanwhile, a contracting credit market has most likely killed off many of the questionable players, but not before they placed thousands of borrowers in loans they can’t afford, Head said.
“The market caused the lenders to collapse,” Head said. “It wasn’t anything the attorney general was doing.”
So, they’re out of business, you can’t get any money from them, so what do you do to discourage this mortgage fraud in the future?
“The way to take care of all of this mortgage fraud is to prosecute people,” Thompson said. “Put a couple of them in jail, not just slap them with fines. Let the other mortgage brokers know they will go to jail.”
I bet there’s more than a few people in Arizona who would agree.