Colorado’s largest foreclosure law firm, run by Larry Castle and his wife, Caren, was so good at its job that it had little trouble ginning up creative ways to pad its billings and reap millions in illegitimate profits on the backs of the banks it represented, the affected homeowners, and real estate investors who later bought the houses, the attorney general’s office said.
Painting a picture of a money-hungry legal outfit that preyed on a foreclosure system gone wild, nickel and diming tens of thousands of cases it handled in Colorado, state attorneys suing Castle said the law firm bulldozed through the mortgage-failure crisis and came out $12 million richer.
It did so by inflating the costs of posting legal notices on homes facing foreclosure and, the state alleges, conspiring with companies that did the work and its own competitors to fix the price at far more than what it actually cost.
“Foreclosures are a legitimate and necessary part of our system. If the borrower can’t pay, the lender has the right to foreclose,” assistant Attorney General Erik Neusch argued to Denver District Judge Morris Hoffman at the close of three-week trial Friday. “But a law firm should not be able to cheat the system, claim false and misleading costs, and profit against investors, homeowners, and their banking clients.”