Colorado, like much of the rest of the nation, is in the midst of a home mortgage crisis. More than 19,000 foreclosures have been filed in the seven-county Denver area in the first nine months of 2007, putting the region on pace to far-exceed last year’s record 19,425 foreclosures.
Last year, CoPIRG worked to pass legislation to address predatory mortgage lending. Several provisions that target unconscionable mortgage practices, such as real estate flipping scams or making loans that a borrower will not be able to repay, will go into effect at the start of 2008.
However, many Colorado statutes contain less-detailed language, and there are a few areas that are not currently regulated by law. Common unregulated practices include equity stripping, an often-fraudulent practice in which a homeowner is “rescued” from foreclosure by signing away their home equity, and steering, the practice of leading homebuyers with troubled credit toward high-interest loans.
This year, CoPIRG advocates will continue to fight predatory lending practices by making our laws more protective of current and prospective homeowners.