Some push for foreclosure freeze in Colorado

Moves by three major mortgage companies to halt foreclosures while they examine their procedures haven't affected homeowners in Colorado, but some in the state would like to see the foreclosure moratoriums extended here.




The lenders have temporarily stopped processing foreclosures as they investigate whether information included in foreclosure documents was properly verified.



Colorado hasn't been affected so far because of the unique process that foreclosures go through here.



"We are the only state that operates through a public trustee," said Stephanie Riggi, manager of the Colorado Foreclosure Hotline. "In other states, a lot of these (foreclosures) were handled through a court proceeding. It may not impact our homeowners who have gone through foreclosures."



But many in the legal community think the moratoriums in place in other states should be extended to Colorado because the foreclosure process is so complex that it's difficult to determine whether the cases have been handled improperly.



Attorney General John Suthers asked Ally Financial to extend the freeze by its GMAC Mortgage unit to Colorado and is considering asking other banks to do the same.



"It's possible that there could be home owners that could be affected here," said Mike Saccone, spokesman for the attorney general's office. "We're still in the exploratory phase. We're still trying to determine if these processes could have affected Colorado consumers."



Other lenders that have suspended foreclosures are JPMorgan Chase & Co. and Bank of America Corp. Separately, news came out this week that a Wells Fargo executive said he verified only the dates on up to 150 foreclosure documents he signed daily. He said he trusted co-workers to make sure other information in the documents was accurate.



Wells Fargo has said it has no plans to stop foreclosures, because the bank is sure that its documents are correct.



Real-estate attorney Robert Goodbinder said the bulk of foreclosures in Colorado are never challenged, because most people don't hire an attorney to help them.



"Because they're not challenged, they just sail through," he said. "We've got a huge number of foreclosures, and the borrowers aren't qualified to determine whether there's a problem. Judges don't set these for a hearing unless somebody files an appropriate response. Virtually no one who is a borrower would know what to look for."



Foreclosures in Colorado rose from July to August but are running lower than last year, according to a report last month from the Colorado Division of Housing.



Statewide foreclosure filings in August totaled 3,142, up from July's 2,718 but down from 3,496 in August 2009.



Ryan McMaken, who tracks foreclosure numbers for the Colorado Division of Housing, said that even if the banks do halt foreclosures here, it's not likely to make a difference in how the local housing market is perceived.



"I think people will know it's a policy change and will proceed with the normal level of caution," he said.



Margaret Jackson: 303-954-1473 or mjackson@denverpost.com







--------------------------------------------------------------------------------





Read more: Some push for foreclosure freeze in Colorado - The Denver Post http://www.denverpost.com/business/ci_16253886#ixzz11V5nsJ4Q