Public Trustee Association
of Colorado
Summer Conference – June 23, 2016
Jennifer Miner Dethmers, Assistant Attorney General
Colorado Attorney General’s Office
[email protected]
720-508-6216
Consumer Protection Section
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Antitrust, Tobacco, and Consumer
Protection
Consumer Fraud
Consumer Credit
Office of Consumer Counsel
Purpose of CCPA
“The CCPA deters and punishes businesses
which commit deceptive trade practices in
their dealings with the public by providing
prompt, economical, and readily available
remedies against consumer fraud.”
Rhino Linings USA, Inc. v. Rocky Mountain Rhino Lining, Inc., 62 P.3d 142, 146
(Colo. 2003)
Purposes of CCPA
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Remediate
Deter
Protect public
Ensure full and fair competition
Consumer Protection Section
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Investigate and prosecute violations of the
Colorado Consumer Protection Act (CCPA)
Civil law enforcement
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Civil penalties
Injunctive relief
Restitution to injured consumers
Unjust enrichment
National and local
Collaboration
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Consumer intake
Consumer organizations
State and federal agencies
Regulators
Other state Attorneys General
Nonprofits, attorneys, interest groups
Consumer Protection Website
http://www.stopfraudcolorado.gov/
Filing a Complaint with the
Attorney General’s Office
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We take complaints very seriously
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Help us identify trends, patterns, practices
Identify potential fraudsters
Include relevant information and
documents
Provide contact information
Filing a Complaint with the
Attorney General’s Office
http://www.stopfraudcolorado.gov/aboutconsumer-protection/complaintforms/mortgage-complaint-form
Representative Cases
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Foreclosure Law Firms
Colorado Foreclosure Protection Act
National Mortgage Servicing Settlements
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http://www.nationalmortgagesettlement.com/
Mortgage Loan Originators and Real
Estate Brokers
Loan Modification Companies
Financial Crisis
Foreclosure Law Firm Cases
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Violations of CCPA and Colorado Fair Debt
Collection Practices Act relating to costs
for postings and title products that
foreclosure law firms claimed were
incurred from affiliated vendors
Filed cases against eight foreclosure law
firms
Foreclosure Law Firm Cases
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Six consent judgments
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Aronowitz & Mecklenburg, LLP
Dale & Decker, LLC
Janeway Law Firm, P.C.
Law Office of Michael P. Medved, P.C.
Medved Dale Decker & Deere, LLC
Vaden Law Firm, LLC
Foreclosure Law Firm Cases
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Consent Judgment Relief
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More than $12 million in disgorgement,
restitution, and civil penalties
Injunctive relief governing type of costs that
can be claimed in foreclosures and prohibiting
use of affiliated vendors for posting and title
services
Robert J. Hopp & Assocs., LLC
and The Hopp Law Firm, LLC
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March 2016 – two-week bench trial
State’s allegations
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Hopp claimed title insurance premium at outset
of the foreclosure, including on cure statements,
even though a title insurance policy could not
issue until after the sale
Hopp rarely issued title insurance policy through
affiliated title vendor, but collected millions in
premiums
Awaiting court’s decision
The Castle Law Group, LLC
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Scheduled for trial in January 2016
The State filed an emergency appeal with
the Colorado Supreme Court to review
trial court ruling before trial began
Oral argument on May 5, 2016
New trial date to be set after decision
Colorado Foreclosure
Protection Act
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C.R.S. §§ 6-1-1101 through -1121
Foreclosure consultants (subpart 2)
Equity purchasing (subpart 3)
Part of CCPA
Criminal penalties for certain violations
Foreclosure Consultants
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Stop or postpone foreclosure sale
Obtain forbearance
Assist in curing default or obtaining
extension
Avoid or reduce impairing homeowner’s
credit resulting from foreclosure or late
payment
Delay, hinder, prevent foreclosure
Foreclosure Consultants
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Foreclosure Consulting Contract
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Fully disclose nature of services and total
amount and terms of compensation
Homeowner has at least 24 hours to review
Date and sign in front of notary
Cancellation notice
Language
Foreclosure Consultants
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Prohibited Acts
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Collect compensation until consultant
performs each and every service that he or
she contracted or represented to perform
Acquire interest in real or personal property of
homeowner
Obtain power of attorney for any purpose
other than to inspect documents
Engage in unconscionable transactions
HB16-1090
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Signed on April 15, 2016
Deceptive trade practice under CCPA for a
person, in the course of his or her business,
to knowingly enter into or attempt to enforce
agreement regarding the recovery of an
overbid on foreclosed property if the
agreement concerns recovery of funds in
possession of (a) a public trustee or (b) the
State Treasurer and does not meet
requirements in C.R.S. § 38-13-128.5
HB16-1090
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C.R.S. § 38-38-111(2.5)(c)
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An agreement to pay compensation to recover
or assist in recovering amount due to
homeowner from public trustee is not
enforceable
Misdemeanor – punishable by imprisonment
in county jail for up to 6 months, $10,000
fine, or both
HB16-1090
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C.R.S. § 38-38-111(3)(a)
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Unclaimed overbids equal to or greater than
$25 and not claimed within 6 months from
date of sale are unclaimed property
Transfer to State Treasurer
HB16-1090
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C.R.S. § 38-13-128.5: Agreements to pay
compensation to recover unclaimed
overbid transferred to State Treasurer
(1)(a) Not enforceable unless entered at
least two years after date of transfer
HB16-1090
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(1)(b) Enforceable if in writing and signed by
owner, describes property and date of sale, sets
forth nature of services to be provided, and
compensation does not exceed:
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20% of amount of overbid if agreement entered 2-3
years after transfer, or
30% of amount of overbid if agreement entered more
than 3 years after transfer
HB16-1090
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(3) Nothing prohibits owner from asserting
that agreement to recover or assist in
recovering overbid is based on excessive
or unjust consideration
(4) Does not apply to agreement to pay
compensation of an overbid of less than
$1,000
Equity Purchasers
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Equity Purchasers
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Acquire title to residence in foreclosure
“Residence in foreclosure”
Principal place of residence
 Encumbered by a residential mortgage loan
 Foreclosure action commenced or equity purchaser
has actual or constructive knowledge that loan is
at least 30 days delinquent or in default
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Excludes persons who acquire title for use as
personal residence
Equity Purchasers
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Equity Purchasing Contracts
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Contact information of equity purchaser
Financial or legal obligations equity purchaser
will assume or, if none, appropriate disclosure
Total consideration paid by equity purchaser
Terms of payment or other consideration
Terms of rental agreement, lease, or any
option or right to repurchase
Notice of cancellation
Language
Equity Purchasers
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Prohibited Acts
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Until time to cancel expires, equity purchaser
shall not …
Accept or record instrument of conveyance of
interest of residence in foreclosure
 Transfer or encumber residence in foreclosure
 Pay homeowner any consideration
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Make untrue or misleading statements of
material fact
Engage in unconscionable transactions
National Mortgage Settlement
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www.nationalmortgagesettlement.com
In February 2012, joint federal-state
settlement with five largest mortgage
servicers
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Bank of America
JPMorgan Chase
Wells Fargo
Ally/GMAC
Citi
National Mortgage Settlement
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Over $50 billion in relief to distressed
borrowers and direct payments
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First and second lien principal reduction
Loan modification and refinancing
Payments to borrowers who lost homes to
foreclosure
Direct payments to states ($51 million to CO)
Nationwide servicing standards
Monitoring by state Attorneys General
National Mortgage Settlement
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Ocwen – February 2014
SunTrust - September 2014
HSBC – March 2016
Mortgage Servicing Complaint
Escalation Process
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After complaint is filed, we escalate it to
mortgage servicer
Mortgage servicer will review complaint and
respond to consumer and our office
Assistant Attorney General oversees the
mortgage complaint process
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Reviews response and follows up if response
is incomplete or insufficient
Our office will forward servicer’s response to
homeowner
Mortgage Servicing Complaint
Escalation Process
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Our office does not make determinations
regarding the veracity of consumer
complaints or servicer responses
However, if a consumer has evidence to
support claims that contradicts the mortgage
servicer’s response, the AAG will review any
relevant documents and follow up with the
servicer if necessary
Mortgage Servicing Complaint
Escalation Process
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Ensure mortgage servicers follow relevant
laws, regulations, and standards
Ensure that loans are properly serviced
Ensure that homeowners are considered
for all appropriate and available loss
mitigation options
Identify areas of non-compliance, trends,
and potential misconduct
Mortgage Loan Originators and
Real Estate Brokers
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Deceptive advertising
Misrepresentations about loan terms and
type of loan
Unlicensed activity
Loan Modification Companies
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Offer to help obtain an interest rate
reduction, payment reduction, principal
reduction, or different loan terms
Usually want an up-front fee or request
that homeowner make mortgage
payments to them – up-front fees illegal!
Request that homeowners ignore
communications from their lenders
Some partner with attorneys
Thank you!
Colorado Attorney General’s Office
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Consumer Protection Section
Colorado Department of Law
Ralph L. Carr Judicial Building
1300 Broadway, 7th Floor
Denver, CO 80203
800-222-4444
720-508-6040
www.stopfraudcolorado.gov
www.coloradoattorneygeneral.gov
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Jennifer Miner Dethmers, Assistant Attorney General
720-508-6216
[email protected]