Foreclosure crisis: Suthers to join probe of lenders

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Colorado Attorney General John Suthers will serve on the executive committee of a multistate effort looking at the integrity of foreclosure processes used by mortgage lenders and servicers in Colorado and across the country.

The effort will probe allegations that lenders, loan servicers or their agents are submitting thousands of affidavits and other documents without properly verifying the accuracy of representations made in those documents.

“Homeowners have a right to know that when their banks or lenders foreclose on their homes that all of the information used in the process is correct,” Suthers said in a statement.

“I signed onto this multistate effort for the fundamental reason that we need to ensure the integrity of Colorado’s foreclosure process. I look forward to gaining a full understanding of the policies and procedures these lenders and servicers have in place to properly verify the accuracy of the representations they make during the foreclosure process.”

Leading the probe is Iowa Attorney General Tom Miller. In all, 49 states, as well as state banking and mortgage regulators in more than 36 states, will look at whether mortgage servicers improperly submitted documents to speed up the foreclosure process.

“This group has the backing of nearly every state in the nation to get to the bottom of this foreclosure mess, and we plan to work together as thoroughly and expeditiously as possible,” Miller said in a statement. “Since this issue affects peoples’ homes and has clear economic implications, this probe and its outcome need to be fair both to homeowners and also to lenders.”

Miller said the group’s scope could expand. He said submitting foreclosure documents without verification, or with false representation, as well as signing some legal documents without notarization might violate state laws and court rules.

“These are starting points, and it’s possible this group may limit, expand or change its objectives,” Miller said. “What’s important here is this is a cooperative and coordinated effort by states to address a serious problem. This is not simply about a glitch in paperwork. It’s also about some companies violating the law and many people losing their homes.”

Suthers encouraged consumers facing foreclosure in Colorado to contact the Colorado Foreclosure Hotline, 1-877-601-HOPE.

Consumers who believe they have the victim of mortgage or foreclosure fraud can file a complaint with the Office of the Attorney General via www.coloradoattorneygeneral.gov/complaint.