A name in this article does stand out…CashCall, through lawyers Neil Barofsky and Katya Jestin, denied it did anything wrong.

Denver Post-

The federal government and several states, including Colorado, on Monday began a crackdown on unscrupulous online loan servicers that allegedly have violated state licensing requirements or state interest-rate caps in their operations nationwide.

Colorado Attorney General John Suthers and Richard Cordray, director of the federal Consumer Financial Protection Bureau, said during a news conference that consumers who fell victim to the alleged scheme were being charged annual interest rates on loans ranging from 90 percent to 350 percent.

Suthers said Colorado allows a maximum of a 21 percent annual percentage rate on such loans.

[DENVER POST]

UNITED STATES DISTRICT COURT
DISTRICT OF COLORADO

RICHARD GEORGE; STEVEN LEAVITT
and SANDRA LEAVITT, and all others
similarly situated
Plaintiffs,

v.

URBAN SETTLEMENT SERVICES d/b/a
URBAN LENDING SOLUTIONS; BANK OF
AMERICA, N.A.
Defendants.

I. INTRODUCTION

1. In early 2009, Bank of America (“BOA”) took more than $45 billion in
government bailout money. As a condition of receiving this bailout, BOA agreed to participate
in the Home Affordable Modification Program (“HAMP”) – a detailed program designed to stem
the foreclosure crisis by providing affordable mortgage loan modifications and other alternatives
to foreclosure to eligible borrowers. BOA signed a contract with the U.S. Treasury on April 17,
2009 agreeing to comply with the HAMP requirements and to perform loan modification and
other foreclosure prevention services described in the program guidelines.

2. Though BOA accepted billions of dollars and contractually agreed to comply with
the HAMP directives and extend loan modifications to eligible homeowners, BOA has
systematically and deliberately worked to sabotage HAMP and to modify as few mortgages as
possible according to its terms. BOA found it was more profitable if homeowners accepted inhouse
modifications rather than the loan modifications mandated by the HAMP process.
Consequently, BOA pushed homeowners who were applying for HAMP modifications toward
more expensive in-house modifications using tactics of outright fraud.

3. Rather than working diligently to reduce the number of loans in danger of default
by establishing permanent modifications, BOA serially strung out, delayed, and otherwise
hindered the modification processes that it agreed to facilitate. BOA’s delay and obstruction
tactics have taken various forms with the common result that homeowners with loans BOA
serviced, and who met the requirements for participation in HAMP, did not get a fair opportunity
to secure a permanent loan modification through the HAMP process.

4. To accomplish its objectives, BOA created a widespread RICO enterprise to
defraud homeowners who sought modifications and then acted as the kingpin of that enterprise.
BOA enlisted Defendant Urban Settlement Services (d/b/a Urban Lending Solutions, referred to
hereinafter as “Urban”) to act as a member of the RICO enterprise and assigned to Urban key
aspects of the process of administering HAMP, including interacting with homeowners seeking
HAMP modifications, collecting and processing documents from homeowners, and
corresponding with homeowners. BOA and Urban worked in concert, under BOA’s direction
and for many years, to frustrate the HAMP process and to prevent as many homeowners as
possible from obtaining permanent loan modifications that complied with HAMP while allowing
BOA to maintain the appearance to regulators and the public of trying to comply with its HAMP
obligations. Through this relationship and with this common goal, BOA and Urban formed an
association-in-fact enterprise that was effectuated through the use of thousands of false wire and
mail communications. As part of the scheme “site leaders” were told BOA would collect more
money if HAMP modifications were delayed and, as such, BOA employees were instructed to
delay HAMP modifications.

5. As part of the loan-modification scheme and enterprise, homeowners seeking
HAMP trial plans were directed by wire and mail instructions from BOA to send financial
information directly to Urban. Consumers were led to believe that they were dealing with BOA
when secretly they were communicating with Urban. As part of the loan-modification scheme
and enterprise, Urban became a “black hole” for documents sent by homeowners. As part of the
enterprise and scheme, BOA used the mail and wires to falsely deny modifications by claiming
that information required of homeowners seeking a HAMP modification had not been received,
when in fact BOA and Urban had received the documents. Oftentimes consumers were led to
believe they were speaking with BOA’s “Office of the President” when in fact they were
speaking with Urban employees. As part of the scheme Urban employees manipulated financial
records to justify ending the HAMP modifications process for homeowners.

6. Numerous former employees of both BOA and Urban report that BOA directed its
employees and contractors to use the wires and mails to deliberately lie to homeowners who
were in the process of trying to obtain loan modifications under HAMP. They further report a
widespread and deliberate practice of knowingly issuing false notices claiming that homeowners
had failed to submit required documentation and of denying HAMP applications en masse for
reasons they knew to be false. These actions were taken with the full knowledge, and at the
direction, of the individuals tasked with running Defendants’ HAMP modification program.

7. This scheme was conducted via interstate mail and phone lines, in thousands of
documents sent via mail and overnight courier, including documents and phone calls intended to
deceive borrowers into believing they would receive HAMP modifications, and letters and phone
calls which were knowingly false about why borrowers were not receiving HAMP modifications.

8. Because of the BOA-Urban loan-modification scheme, hundreds of thousands of
homeowners were wrongfully being deprived of an opportunity to cure their delinquencies, pay
their mortgage loans and save their homes. By failing to live up to its obligations under the
terms of the agreement it entered into with the Department of the Treasury, and the terms of the
contracts it formed with individual homeowners, BOA has left thousands of borrowers in a state
of limbo – often worse off than they were before they sought a modification from BOA.

9. On behalf of nationwide classes of borrowers, Plaintiffs state a cause of action
under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962(c), alleging
that Defendants created an association-in-fact enterprise designed to mislead and deceive
borrowers through use of the United States mail and wires. On behalf of the members of those
classes, Plaintiffs seek declaratory relief and/or a judgment of liability.
10. In addition, on behalf themselves and statewide classes of similarly situated
borrowers, Plaintiffs state claims of promissory estoppel for representations made to them by
Defendants.

[…]

DENVER- Colorado Attorney General John Suthers announced today the Consumer Credit Unit of his office filed a civil lawsuit against United Credit Recovery (UCR), its principal and director, Leonard Potillo (D.O.B. 06/26/65), as well as against GTF Services and Standley & Associates, alleging that they sought to pass off fraudulent bank documents in their attempt to collect on outstanding debts and engaged in deceptive trade practices that harmed consumers.

“UCR faked bank officer signatures on documents to orchestrate a debt-for-sale scheme from which they handsomely profited,” explained Suthers. “The scheme involved thousands of individual accounts totaling tens of millions of dollars,” Suthers continued.  

According to the complaint, UCR purchased consumer debt from Wells Fargo and US Bank and then used account information provided by the banks to create hundreds of thousands of fake affidavits purporting to describe and to verify debt owed by consumers. UCR profited by using the fake affidavits in collecting on the debt and in reselling debt to third-party debt collectors.

In addition to using the affidavits for its’ own collection purposes, UCR sold accounts of Colorado consumers to other agencies and distributed the falsely-created affidavits to those agencies. GTF, one such agency, is alleged to have used the affidavits through the debt-collection law firm Standley & Associates, who filed the affidavits in more than 300 debt collection lawsuits against consumers in Colorado.

The fabricated affidavits have assisted in the collection of money from Colorado consumers by being filed in court as evidence of the amount owed and by being presented as validation of the debt directly to Colorado consumers.

The complaint was filed pursuant to the Colorado Consumer Protection Act and the Colorado Fair Debt Collection Practices Act with the Denver County District Court.

Colorado’s complaint asks the courts to completely compensate or restore to their original position, all consumer injured by the defendants.

# #  #

Attachments: 

News Release

Complaint

Source: coloradoattorneygeneral.gov

FOR IMMEDIATE RELEASE

September 17, 2013

Contact: Bryan Hubbard
(202) 649-6870

AND we know this has been going on for a very long time…take a look at the default servicing companies and the “legal fees” they charge!

Biz Journal-

Colorado Attorney General John Suthers’ investigation into law firms allegedly overbilling for foreclosure filings — or billing for filings they never made — likely will turn into a national story, according to a Cato Institute fellow and national bloggers who are following the case.

The Denver Post has published a series of articles on the local investigation this summer, citing court documents on Suthers’ and other investigations.

“National mortgage and banking bloggers have taken the view that these practices are not just in Colorado,” said Walter Olson, Cato Institute fellow. “Colorado just happens to be the first place where the attorney general has launched an investigation. Underneath it all is a pattern you can easily see being replicated in other states.”

[BIZ JOURNAL]

H/T MJ

Denver Post-

An attorney turned whistle-blower at Colorado’s second-largest foreclosure law firm has detailed to state investigators a pattern of abuses that stretch beyond the scope of their investigation into alleged overbilling practices.

Susan Hendrick testified at a hearing Thursday that she told the state attorney general’s office about bill-padding she witnessed while a lawyer at Aronowitz & Mecklenburg in Denver, conduct that investigators say needlessly cost homeowners facing foreclosure millions of dollars. She then laid out a number of other alleged abuses she says happened.

The abuses ranged from the padding of attorney hours to allegations that the law firm destroyed evidence that prosecutors were seeking in their investigation into billing practices by foreclosure law firms, according to testimony in Denver District Court.

[DENVER POST]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

Read the order here: Mbaku et al v. Bank of America | Challenge to the constitutionality of Rule 120 of the Colorado Rules of Civil Procedure is certified to the Colorado Attorney General

Denver Post-

A second federal lawsuit contesting the constitutionality of Colorado’s foreclosure laws has emerged.

Unlike the case of an Aurora woman who obtained an interim federal injunction against the foreclosure auction of her house, the other involves a federal judge who decided a Denver man’s 14th Amendment guarantee of due process was in question.

U.S. District Judge Philip Brimmer last week dismissed the entirety of John Mbaku’s complaint against Bank of America that challenged the bank’s right to foreclose on his condominium. Brimmer determined there was a constitutional issue, though Mbaku didn’t bring it up specifically.

[THE DENVER POST]

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO

Judge Philip A. Brimmer
Civil Action No. 12-cv-00190-PAB-KLM

JOHN M. MBAKU,
LUVIBIDILA JOLIE LUMUENEMO,
Plaintiffs,

v.

BANK OF AMERICA, NATIONAL ASSOCIATION,
as successor by merger to BAC Home Loans Servicing, LP
f/k/a Countrywide Home Loans Servicing LP,
Defendant.

__________________________

ORDER CERTIFYING MATTER TO THE COLORADO ATTORNEY GENERAL
__________________________

In the Court’s February 1, 2013 Order [Docket No. 26], the Court declined to
dismiss the claim advanced by plaintiffs John M. Mbaku and Luvibidila Jolie
Lumuenemo that Colorado Rule of Civil Procedure 120 violates the due process clause
of the Fourteenth Amendment.1 Docket No. 26 at 18-19; see also Docket No. 1 at 2-3,
¶¶ 4-6.

Section 2403(b) of Title 28 of the United States Code provides that:

In any action, suit, or proceeding in a court of the United States to which a
State or any agency, officer, or employee thereof is not a party, wherein the
constitutionality of any statute of that State affecting the public interest is
drawn in question, the court shall certify such fact to the attorney general of
the State, and shall permit the State to intervene for presentation of
evidence, . . . and for argument on the question of constitutionality.

The local rules of the District of Colorado explicitly incorporate this provision, requiring
that “[o]n receipt of a notice of unconstitutionality, the court shall comply with the
certification provisions of 28 U.S.C. § 2403.” D.C.Colo.LCivR 24.1C.

Rule 120 of the Colorado Rules of Civil Procedure sets forth a procedure by
which a party may initiate foreclosure proceedings. Colo. R. Civ. P. 120. Given that
Rule 120 involves adjudication of property rights, it affects “the public interest” and
plaintiffs’ challenge has “drawn in question” its constitutionality. See 28 U.S.C.
§ 2403(b). Accordingly, it is

ORDERED that plaintiffs’ challenge to the constitutionality of Rule 120 of the
Colorado Rules of Civil Procedure is certified to the Colorado Attorney General. It is
further

ORDERED that the Clerk of this Court shall forward a copy of this Order, the
complaint [Docket No. 1], and the February 1, 2013 Order [Docket No. 26], certified
under seal, to the Colorado Attorney General.

DATED May 9, 2013.
BY THE COURT:
s/Philip A. Brimmer
PHILIP A. BRIMMER
United States District Judge

IN RE JIMENEZ

In re: LEONOR HILDA JIMENEZ, Chapter 13, Debtor.
Case No. 12-26282 HRT.
United States Bankruptcy Court, D. Colorado.

February 1, 2013.

ORDER ON OBJECTION TO PROOF OF CLAIM

HOWARD R. TALLMAN, Bankruptcy Judge.

This case comes before the Court on Debtor’s Objection to Proof of Claim #4-1 Filed by FirstBank (docket #14) (the “Objection”).
FirstBank (the “Bank”) filed its Response to Objection to Proof of Claim #4-1 Filed by FirstBank (docket #24) (the “Response”). The Court set the matter for hearing. In anticipation the hearing, Debtor filed her Objection (docket #38), which is, in substance, a motion in limine seeking to exclude evidence of the Bank’s attorney fees and costs alleging the Bank’s failure to properly itemize the pre-petition interest, fees, expenses and other charges included in the amount of its claim as required under FED. R. BANKR. P. 3001(c)(2)(A).

The Court conducted a hearing on January 10, 2013, and heard evidence and argument of the parties. This matter raises two issues — one substantive and one procedural. The Debtor has objected to the amount of the Bank’s pre-petition attorney fees incurred with respect to its three aborted pre-petition foreclosure proceedings commenced against the Debtor’s home. Debtor’s Objection thus raises the substantive issue of the reasonableness of the pre-petition attorney fees incurred by the Bank in order to pursue those three foreclosure proceedings. The procedural issue concerns whether the Bank complied with Rule 3001 and the appropriate penalty to be imposed if the Bank’s proof of claim was not filed in compliance with the rule. At the close of the Debtor’s evidence, the Bank made an oral motion for directed verdict on the basis that the Debtor has not met her burden to present sufficient evidence to negate the prima facie validity of the Bank’s proof of claim.

I. FACTUAL BACKGROUND
Debtor executed a promissory note to the Bank on June 29, 2001, in the principal amount of $140,000.00, payable at 7% per annum interest over a term of 30 years (the “Note”). The proceeds of the Note were used to purchase the Debtor’s residence at 920 Winona Court, Denver, Colorado (the “Property”), and the Note is secured with a deed of trust granting the Bank a security interest in the Property (the “Deed of Trust”) (collectively the Note and the Deed of Trust are the “Loan Documents”).

Debtor has fallen behind on her Note payments several times. Three pre-petition proceedings to foreclose on the Deed of Trust were initiated as a result of those delinquencies. Those proceedings were initiated in 2004; in 2008; and in 2011. Each time, the Debtor cured the delinquency and the Bank dismissed its foreclosure. However, the attorney fees and expenses incurred by the Bank in each of those foreclosure proceeding are collectable from the Debtor under the Note and Deed of Trust and they remain outstanding obligations of the Debtor.

The Debtor’s obligations under the Note and Deed of Trust again became delinquent in 2012. The Debtor anticipated that the Bank would again seek to foreclose its Deed of Trust and, lacking the wherewithal to cure the delinquency, the Debtor filed this bankruptcy case under chapter 13 on August 2, 2012.

The Bank filed its proof of claim #4-1 on September 4, 2012 (the “Claim”). The Bank’s Claim reflects a total secured debt of $132,945.08, including a delinquent arrearage amount of $17,515.61. As reflected in the Bank’s Claim, that arrearage consists of three delinquent payments in the total amount of $3,188.01 and $14,327.60 of pre-petition fees, expenses and charges. The Bank’s Claim itemizes the pre-petition fees, expenses and charges as late charges amounting to $2,231.93 and attorney fees of $12,095.67.1

The evidence showed that the true amount of pre-petition attorney fees incurred by the Bank is $7,868.90. In addition to attorney fees, the Bank incurred appraisal fees of $970.00. The Bank also incurred expenses such as public trustee fees, title fees, filing fees, fax costs and photocopy costs amounting to $3,208.67.

II. DISCUSSION
The Bank has not complied with Rule 3001(c)(2)(A). The Rule provides in relevant part that
If, in addition to its principal amount, a claim includes interest, fees, expenses, or other charges incurred before the petition was filed, an itemized statement of the interest, fees, expenses, or charges shall be filed with the proof of claim.

FED. R. BANKR. P. 3001(c)(2)(A). The Bank’s Claim includes the standard Mortgage Proof of Claim Attachment (Form B 10 (Attachment A)). That attachment contains numerous categories of typical fees and expenses to assist a claimant in itemizing its fees and expenses in order to comply with Rule 3001(c)(2)(A)’s itemization requirement. But all of the appraisal costs; title fees; public trustee fees; and filing fees were simply included as attorney fees of $12,095.67. In fact, as the Bank’s Exhibit 12-A shows, that figure includes over $4,000.00 of appraisal costs and other expenses that Rule 3001(c)(2)(A) requires to be itemized on a proof of claim whenever interest, fees and other charges are part of the claim being filed in an individual case such as this one.

Two consequences flow from the Bank’s non-compliance with Rule 3001(c)(2)(A). First, the Bank does not enjoy the Rule 3001(f) evidentiary effect of a claim that is filed in accordance with the Rules. Rule 3001(f) provides that a proof of claim that is in compliance with the Rules shall constitute prima facie evidence of the amount and validity of the claim. Because the Bank’s Claim is not entitled to that evidentiary presumption, the Bank bore the full burden of proof to support its Claim. Therefore, the Court will deny the Bank’s motion for directed verdict. The second consequence is that a proof of claim that does not comply with the itemization requirement of Rule 3001(c)(2)(A) is subject to sanctions under Rule 3001(c)(2)(D).

A. Reasonableness of the Bank’s Claimed Attorney Fees
The Bank presented evidence that the total amount of fees, expenses and appraisal costs due to the Bank in connection with its Claim is $12,047.57.2 The portion of this figure that reflects the Bank’s attorney fee expense is $7,868.90. The Debtor contests the reasonableness of the amount of the Bank’s attorney fees.

The Court heard expert testimony presented by the Debtor on the reasonableness of the attorney fees incurred by the Bank with respect to the pre-petition foreclosure actions that it initiated. Defendant’s expert has extensive experience in legal practice, filing and conducting deed of trust foreclosures in the state of Colorado, and is a partner in a law firm specializing in deed of trust foreclosures. Her experience is in high-volume foreclosure firms. Those firms use paralegal personnel to do the bulk of the routine processing of the foreclosure actions and use technology to great advantage. They tend to serve the market created by high volume servicers of mortgage loans that are held or guaranteed by governmental or quasi-governmental entities. Those high-volume foreclosure firms operate within schedules of flat-rate fees under the contracts that they enter into with the high-volume loan servicers.

By contrast, the Bank holds and services the Debtor’s mortgage loan. It has formed a relationship with the Denver law firm of Rothgerber, Johnson & Lyons LLP (“Rothgerber”) and Rothgerber does the Bank’s legal work. Rothgerber is a full-service law firm and primarily bills for its services according to the hourly billing rates of its attorneys and paralegal personnel. Stephen Johnson is the partner at the Rothgerber firm who is reflected on invoices as having performed legal services in connection with the Bank’s Claim. A paralegal designated on the invoices as P. Lord also performed services for the Bank. As of December of 2011, the invoices in evidence show Mr. Johnson’s billing rate to be $425.00 per hour and Ms. Lord’s billing rate to be $185.00 per hour. The earliest invoices in evidence show Mr. Johnson billing $340.00 per hour and Ms. Lord billing $160.00 per hour.

The expert testimony presented by the Debtor was not helpful to the Court in analyzing the reasonableness of attorney fees in connection with the Bank’s Claim. The specialized legal environment within which Debtor’s expert has operated is quite different from the type of full-service firm employed by the Bank. In fact, she candidly acknowledged that her experience has been exclusively with high-volume foreclosure firms working on a flat-rate basis and that she has no experience with hourly billing.

The fact that foreclosure services provided by a specialized high-volume mortgage foreclosure firm are dramatically lower than the cost of similar services provided at an hourly rate by a full-service firm does not, in and of itself, demonstrate unreasonableness of the higher fees. The Bank has a long-standing relationship with the Rothgerber firm and has made a business decision to employ that firm to do its legal work — even the foreclosure work they could have done much more inexpensively at a specialized foreclosure firm.

The Court will deny the Debtor’s objection to the reasonableness of the attorney fee portion of the Bank’s Claim. Because Debtor’s evidence went to a type of high volume legal practice, compensated through negotiated flat fees, which is unlike the Rothgerber full-service practice that charges hourly rates, that evidence failed to shed light on the reasonableness of the Rothgerber fees. Moreover, Rothgerber’s invoices show an exercise of billing judgment and a delegation of work to a paralegal with a lower billing rate. Based on the Court’s experience, Rothgerber’s rates are within the reasonable range of fees that the Court sees charged in bankruptcy matters. The Court will not fault the Bank for choosing a full-service firm to do its legal work.

B. Sanctions under Rule 3001(c)(2)(D).
This case illustrates the purpose of the requiring claimants to itemize fees and expenses in the proof of claim. The Bank’s Claim reflects attorney fees in the amount of $12,0957.67 when, in reality, the evidence establishes that the total attorney fees were $7,868.90. Under the rules, the Debtor had the right to expect that she would have been properly informed of the actual amount of attorney fees and the nature and amount of other expenses that were improperly lumped in with the attorney fees on the Bank’s Claim. The Court cannot speculate what difference the correct information would have made to the Debtor. It is clear from her objection that she viewed attorney fees in excess of $12,000.00 to be excessive. Whether a proof of claim that reflected the correct attorney fee figure would have been acceptable to her or would have prompted the same objection cannot be known. Nonetheless, she had a right to have correct information provided in the Bank’s Claim and Rule 3001(c)(2)(D) provides that the Court may invoke an appropriate sanction on account of the Bank’s failure to comply.

The Rule permits the Court to exclude information omitted from the Bank’s Claim as evidence at trial. FED. R. BANKR. P. 3001(c)(2)(D)(i). Accordingly, the Court will deny admission of the omitted information. The Bank’s proof of claim does not itemize any of the appraisal fees of $970.00 nor does it itemize any of the other expenses of $3,208.67. The only fees that the Bank shows on its proof of claim are the attorney fees and properly itemized late charges, therefore, the Court will only admit evidence of the attorney fees which the Court finds total $7,868.90 and the uncontested late charges of $2,231.93.

In mitigation of its failure to comply with Rule 3001(c)(2)(A), the Bank’s counsel provided detailed invoices of all legal services reflected in the Bank’s Claim to Debtor’s counsel in time for Debtor’s counsel and her retained expert to fully review those in preparation for the hearing on Debtor’s Objection. In addition, nothing in the evidence persuades the Court that there is any element of intention or willfulness involved in the Bank’s failure to comply. Under the circumstances, the Court finds that exclusion of all of the Bank’s evidence, as requested by the Debtor, would be an unnecessarily harsh sanction.

In addition to authorizing the Court to exclude the Bank’s evidence at hearing, it allows the Court to “award other appropriate relief, including reasonable expenses and attorney’s fees caused by the failure.” FED. R. BANKR. P. 3001(c)(2)(D)(ii). In addition to excluding the Bank’s evidence with respect to the non-itemized expenses, under Rule 3001(c)(2)(D)(ii), the Court will order: 1) payment by the Bank of the attorney fees and expenses incurred by the Debtor in connection with her Objection to the Bank’s Claim; and 2) denial of the Bank’s ability to charge its fees and expenses incurred in defense of the Debtor’s Objection to the Debtor under the Loan Documents.

C. Allowance of the Bank’s Proof of Claim
In accordance with the above discussion, the Bank’s Claim will be allowed as follows:

1. Total Claim

a. Principal $116,723.41
b. Interest $2,111.10
c. Late Charges $2,231.93
d. Appraisal Costs $0.00 Disallowed; Rule 3001(c)(2)(D)(i)
e. Expenses $0.00 Disallowed; Rule 3001(c)(2)(D)(i)
f. Attorney Fees $7,868.90
___________
g. Claim Total $128,935.34

2. Arrearage Claim

a. Installments $3,188.01 (3 pmts. principal, interest & escrow)
b. Fees and expenses $10,100.83 (late charges and attorney fees only)
___________
c. Arrearage Total $13,288.84

III. CONCLUSION
The Bank has demonstrated that it did incur and pay the attorney fees reflected in the Bank’s Exhibit 12-A and the Debtor’s evidence failed to raise an issue as to the reasonableness of those fees. Nonetheless, the Bank’s failure to itemize is precisely the issue that Rule 3001(c)(2)(A) is intended to address so that debtors have complete information with respect to fees and other charges included in a mortgage creditor’s claim. With more complete information, debtors are better able to determine whether a claim objection is appropriate. For that reason, a substantial penalty is appropriate even though the Bank’s failure appears to be a matter of inadvertence. Payment of the Debtor’s fees and costs will be made directly to Debtor’s counsel. The Court will determine the amount of attorney fees and expenses to be paid upon the submission of a bill of costs by Debtor’s counsel.

Therefore, in accordance with the above discussion, it is
ORDERED that the Bank’s oral motion for directed verdict is DENIED. It is further

ORDERED that Debtor’s Objection to Proof of Claim #4-1 Filed by FirstBank (docket #14) is GRANTED IN PART. The Court hereby determines that the allowed amount of the Bank’s Claim is $128,935.34 and the amount necessary to cure the mortgage arrearage is $13,288.84. It is further

ORDERED that the Debtor’s Objection (to the Bank’s exhibits under Rule 3001) is GRANTED IN PART. Under Rule 3001(c)(2)(D)(i), as a sanction for FirstBank’s failure to fully itemize its fees and expenses, the Court has not considered the Bank’s evidence of appraisal costs and expenses not itemized on its proof of claim and the disallowance of those expenses is reflected in the Bank’s allowed claim above. It is further

ORDERED that as an additional sanction, under Rule 3001(c)(2)(D)(ii), the Bank will pay to Debtor’s counsel an amount to be determined by the Court for attorney fees and expenses incurred in connection with the Debtor’s Objection. Debtor’s counsel shall file a bill of costs reflecting attorney fees and expenses incurred in connection with Debtor’s Objection to Proof of Claim #4-1 Filed by FirstBank and the hearing held in connection with that Objection no later than February 15, 2013, and FirstBank shall have until March 1, 2013, to file any objection it may have to the bill of costs. Thereafter, by separate order, the Court will determine the amount of the fees and expenses to be levied against FirstBank. It is further

ORDERED that FirstBank is hereby prohibited from adding attorney fees, charges and expenses incurred in order to defend against Debtor’s Objection as expenses to be charged to the Debtor under the mortgage Loan Documents.

Footnotes
1. During the presentation of evidence, counsel for the Bank brought to the Court’s attention a duplication on an invoice. The total of the submitted invoices should be $12,047.57 which is the total of fees, expenses and appraisals listed on the Bank’s summary Exhibit 12-A.

2. These are broken down as reflected on the Bank’s Exhibit 12-A as: 1) attorney fees of $7,868.90; 2) expenses of $3,208.67; and 3) appraisal fees of $970.00.

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez

Civil Action No. 12-cv-02716-WJM

LISA KAY BRUMFIEL,
Plaintiff,

v.

U.S. BANK,
LARRY CASTLE, in his individual and corporate capacity, and
CASTLE STAWIARSKI, LLC,
ROBERT J. HOPP, in his and corporate and individual capacities,
CYNTHIA MARES, Public Trustee in her official capacity,
MERS, a division of MERSCorp, and
DOES 1-100,
Defendants.

ORDER GRANTING PLAINTIFF’S REQUEST FOR
INTERIM PRELIMINARY INJUNCTION

EXCERPT:

3. The Public Interest

A party seeking a preliminary injunction must show the issuance of the injunction
would not be adverse to the public interest. Heideman, 348 F.3d at 1188.
Here, again, this factor weighs strongly in favor of Plaintiff. The Amended
Complaint is detailed in its allegations, and brings into question the role of state action
and the interface between public and private players in the foreclosure process. (ECF
No. 45.) Indeed, the Court considers these issues to be of significant public interest.
The question of whether Colo. Rev. Stat. 38-38-101—a state statute which impacts
many thousands of Colorado residents given the role of Rule 120 in foreclosure
proceedings—is unconstitutional on due process grounds is manifestly a matter that
would be in the public interest to determine after careful and deliberate consideration.
Thus, the factor weights heavily in Plaintiff’s favor and the Court finds that she has
satisfied this prong of the test for the purposes of temporary injunctive relief.

[…]

[ipaper docId=139980941 access_key=key-2mduzdo2bdy80trp3r2v height=600 width=600 /]

The Denver Post-

A federal judge on Monday made the rare move to stop the foreclosure auction of an Aurora woman’s house in a case that squarely takes on the constitutionality of Colorado’s foreclosure laws.

U.S. District Judge William Martinez issued a preliminary injunction against the sale of Lisa Kay Brumfiel’s four-bedroom home, scheduled for Wednesday in Arapahoe County, until the judge can decide whether parts of state law are unfair to homeowners facing the loss of their house.

At issue is a provision in state law that allows lawyers to assert that their client, typically a bank, has the right to foreclose on a property even though they might not have the original mortgage paperwork to prove it.

[THE DENVER POST]

DENVER–Colorado Attorney General John Suthers today announced that the State of Colorado will receive $1.8 million as part of a settlement with Lender Processing Services, Inc. (NYSE: LPS) for past document execution practices by LPS subsidiaries DocX, LLC and LPS Default Solutions, Inc. Florida-based LPS provides technology and other services to mortgage loan servicers.  

During a period from January 1, 2008 to December 31, 2010, certain residential mortgage loan servicers authorized specific persons employed by LPS subsidiaries DocX and LPS Default Solutions to sign or assist with the execution of mortgage-related documents, including lost instrument affidavits, deed of trust lien releases, and assignments of deeds of trust. Some of the mortgage -related documents generated or executed by LPS subsidiaries contained defects such as unauthorized signatures and improper notarizations. 

“This settlement with LPS is part of our on-going investigation into all facets of the foreclosure process in Colorado,” said Suthers. “It is important that the foreclosure process work as intended and that borrowers and the legal system have confidence in it.”

Between March 1, 2009 and November 1, 2009, employees and agents of DocX were directed by management of DocX to implement a program under which some DocX employees signed mortgage-related documents in the name of other DocX employees, who were or had been at one time authorized to sign on behalf of certain mortgage servicers. DocX referred to these signers as “surrogate signers,” who then executed certain mortgage-related documents in the name of other DocX employees without indicating that the document had been signed by a surrogate signer.

As part of the settlement, LPS and its subsidiaries agree not to engage in any surrogate signing program or execute any mortgage-related documents without an affiant’s review and personal knowledge of the accuracy and completeness of the statements in the documents. LPS and its subsidiaries also will ensure that any mortgage-related document that is executed on behalf of a servicer is done pursuant to proper and verifiable authority to sign on behalf of the servicer.

The settlement funds will be used for programs related to foreclosure prevention, loan modification and housing, to reimburse the Colorado Attorney General’s Office for its attorney fees and costs, and for future consumer protection and antitrust enforcement and education efforts in the state.

# # #

Attachments: 

102912_lps_mortgage_related_document_settlement.pdf

102912_fully_executed_assurance_discontinuance_colorado.pdf

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sets of 100 documents for each of seven law firms — Vaden, Dale & Decker, Castle Stawiarski, Hopp, Aronowitz & Mecklenburg , Medved and Janeway

The Denver Post-

Mortgage fraud investigators with the Colorado Attorney General’s office have gathered documents filed with at least four county public trustees’ offices by some of the state’s largest foreclosure law firms, according to several people familiar with the request.

Trustees in four counties confirmed they each provided hundreds of pages of documents — mostly bid and cure statements associated with foreclosures spanning a five-year period — in response to a request by the attorney general’s consumer protection division.

Deputy Attorney General Jan Zavislan, who heads that office’s consumer protection division, declined to comment about the scope or nature of the request, or even to say it was an inquiry or formal investigation.

[THE DENVER POST]

The Denver Post-

Thousands of Colorado homes were taken in foreclosure in recent years by banks that probably never had the right to do so because no one bothered to challenge the process, said a lawyer who worked for the state’s biggest foreclosure law firm.

Lawyers often blindly sign a document attesting that the bank they represent has the right to foreclose — allowable under Colorado law — without ever actually seeing the original loan documents, attorney Keith Gantenbein said. He worked at Castle Stawiarski, where more foreclosure cases originate than any other law firm statewide.

Gantenbein said he and other lawyers signed “tens of thousands” of documents known as statements of qualified holder. The papers certify lenders’ right to foreclose, generally with little more than an e-mail from a bank or loan servicer telling the lawyers to file the case.

Read more: [DENVER POST]

This is going to raise many eyebrows…

American Banker-

The Federal Reserve Board made history Friday by invoking special powers to shut down a Colorado bank, stepping into a role normally reserved for state regulators.

The central bank appointed the Federal Deposit Insurance Corp. the receiver for the $1.38 billion-asset Community Banks of Colorado in Greenwood. The FDIC then sold the bank’s operations to Bank Midwest NA in Kansas City, Mo.

[American Banker]

Foreclosure paperwork miscues piling up

On a December morning, dozens of people cycled through the benches outside Room 163 of the Denver City and County Building. A few cradled children, and some looked at the floor. Deja Balles held a document from her landlord.

It demanded just shy of $2,700 in back rent for October, November and December. Like the others, Balles waited her turn to meet with a tenant advocate or attorney as part of a free eviction defense legal clinic. She hoped she would qualify for rental assistance that might keep her from being kicked out of her apartment during the holiday season.

“I’m just stressed,” the 21-year-old said, voicing concern for her three cats. “I have pets, so I’m more scared about where they are going to go if they don’t give me more time or rent assistance.”

The scene that played out on the ground floor of city hall that morning, just steps from eviction court, has become a regular occurrence in a city where rising rents have left household incomes in the dust and COVID-19-era tenant protections have ended. Denver landlords filed 12,910 evictions last year, according to Denver County Court records — by far the most in any year going back to at least 2008.

To continue reading the rest of the article, please click on the source link below:

https://www.greeleytribune.com/2024/01/15/denver-rental-assistance-program-evictions-funding-increase/

The Larimer County commissioners Tuesday heard a presentation about an effort to reduce evictions within the county that was funded in part by money from the county’s allocation of the American Rescue Plan Act.

The Colorado Poverty Law Project, a Denver-based nonprofit, received $125,000 from Larimer County’s Immediate Needs Grant program, which distributed money from the U.S. Treasury to businesses, nonprofits and other organizations during the COVID-19 pandemic.

The funds were used, according to Ericka Welsh, a staff attorney who represents Larimer County for the Colorado Poverty Law Center, to provide legal services and community education to tenants in the area, as well as attorneys who might not be familiar with the laws and regulations surrounding housing in Colorado.

To continue reading the rest of the article, please click on the source link below:

https://www.reporterherald.com/2023/09/12/eviction-prevention-nonprofit-aided-by-larimer-county-grant/

RESIDENTS at a hotel have been left unsure of their next steps following an abrupt eviction from their landlord.

Tenants at the Travelers Inn, Topeka, Kansas, were given just hours to leave their homes.

The residents were evicted on Wednesday, but the reason behind the decision remains unclear.

Earlier this month, the Kansas Department of Agriculture revoked the hotel’s lodging license due to health hazards.

This meant that the hotel could no longer rent out to new guests.

To continue reading the rest of the article, please click on the source link below:

https://www.the-sun.com/news/8971147/residents-evicted-from-home-landlord-gave-us-no-time/

CreditLink Corporation, a renowned nationwide tenant background screening company, founded in August 1979 in San Diego celebrates 44 years since starting the eviction reporting industry. David Moffit, Founder/CEO envisioned providing comprehensive and reliable tenant screening checks. CreditLink quickly established themselves as the innovative pioneer in the industry. Their notable service of providing eviction reports, was helping property owners make informed decisions.

Further information available at thehttps://www.tenantscreening.net website. There are no membership fees or monthly minimum and simple to sign up for a new account.

Ever since 1979 CreditLink has been the leader of tenant screening checks in the USA. Since opening their doors in San Diego, they have grown in Southern California providing property managers in Riverside, Murietta, Temecula, Hemet, Lake Elsinore, Moreno Valley, Coachella, Corona, Palm Springs, Palm Desert, Desert Hot Springs, Indio, with the best renter screening services. Moreover their tenant screening services have expanded nationwide into areas such as Portland, Eugene, Tacoma, Arlington, Portmouth, Oxon Hill, Boca Raton, Colorado springs, Scottsdale, Albuquerque, Kansas City, Lincoln, El Paso, Green Bay, Reno, and more.

Read more: https://www.digitaljournal.com/pr/news/ampifire/riverside-tenant-screening-background-checks-and-eviction-reports-company#ixzz88WqoNZ1H

Colorado Governor Jared Polis signed a bill into law earlier this month that helps protect reverse mortgage borrowers from foreclosure if they are impacted by natural disasters. The law was passed as part of a collaboration between state lawmakers and members of the reverse mortgage industry.

The bill, HB23-1266, or “Reverse Mortgage Repayment When Home Uninhabitable,” suspends reverse mortgages from the repayment requirement when a “greater force” renders the property uninhabitable as a principal residence. A final revision of the bill passed in April with a vote of 30-5.

The bill extends the timeline from one to three years for HECM borrowers to be out of their homes if they are impacted by natural disasters.

The bill, spearheaded by Rep. Kyle Brown (D), who represents a reverse mortgage borrower impacted by the issue, was sent to Polis’ desk on May 5. In February, Brown vowed to to take a closer look at how the reverse mortgage occupancy requirement is impacted by natural disasters, and said he hoped to succeed where previous Colorado state congresses had failed to act.

To continue reading the rest of the article, please click on the source link below:

https://reversemortgagedaily.com/articles/co-law-protects-reverse-borrowers-impacted-by-natural-disasters-from-foreclosure/