Foreclosure Filings

In order to win a case in court, a party must prove through documentation or witnesses that he or she if entitled to win. Not so with respect to foreclosures. In Colorado, banks and lenders do not need to provide clear proof that they are the owners of a note or mortgage before they are allowed to foreclose.

Since 2006, in Colorado the attorney for the lender can simply sign a certification that the lender owns the mortgage and is entitled to foreclose. The lender does not need to provide documentation showing the chain of title to prove the lender has standing.

Mortgages are often sold by banks, to other banks or to a firm that will “securitize” or bundle the mortgage with other loans without proper documentation.

In a recent study of San Francisco foreclosures, 84% of the files contained what appeared to be clear. The five largest lending banks recently struck a $25 billion settlement with the federal government and many states based on foreclosure abuses noted in a scathing report by the Inspector General of HUD.
I have heard from many Colorado citizens who are shuffled from lender to lender when they attempt to modify a loan. They want to make payments, but no one can tell them to whom. They make a payment to one company only to be told they should pay another one, and their payments do not get credited.

A bill I sponsored, House Bill 1156, would have required lenders to provide documentation proving that they hold a debt and have the power to foreclose before they take someone’s home. Sadly, the bill was killed in committee on March 14. I am committed to bringing this issue back to the General Assembly next year to restore integrity to the process and protect Colorado consumers.

For more information on Rep. McCann, visit bethmccann.org.