Darren at Bill Signing

Darren O'Connor of Colorado Foreclosure Resistance Coalition present for Governor Hickenlooper's signing of HB14-1295, sponsored by Representative Beth McCann (next to O'Connor, in pink) and co-sponsored by Representative Angela Williams (at right, in green). Also present, from left (after Rep. McCann): Joe Boven, unknown, Keith Gantenbein, Leonard McWilliams, and Governor Hickenlooper.

Date: May 9, 2014
Colorado Foreclosure Resistance Coalition Addresses Passage of Legislation To Protect Homeowners

Darren O’Connor, an activist and organizer with the Colorado Foreclosure Resistance Coalition was invited to and attended the bill signing ceremony for House Bill 14-1295 today with the bill sponsors, legislative leaders, and the Governor. The bill sets out guidelines in the foreclosure process to require the foreclosing party provide a homeowner with a single point of contact, and attempts to prohibit dual tracking.
The requirements for a single point of contact is an attempt to ensure that when a homeowner contacts their servicer they will be able to speak with someone not only familiar with the specifics of the situation, but also the knowledge to help a homeowner resolve the issue prior to foreclosing. Without a single point of contact homeowners rarely, if ever, speak to the same person more than once, so every time they call their servicer they have to bring someone new up to date on every specific detail.

The prohibiting of dual tracking is intended to stop the common practice of a servicer assuring and intentionally misleading a homeowner that the issues are being worked out or are resolved, while proceeding with foreclosure at the same time. This practice makes it very common for a homeowner to receive an eviction notice while the bank is still telling them that everything is fine and they haven’t been and won’t be foreclosed on.

Mr. O’Connor attended the bill signing in a show of gratitude and respect to the bill’s main sponsor, Representative McCann, for the efforts she has made to bring justice to Colorado’s foreclosure process and her help to individuals facing unjust foreclosure over the last few years.
Unfortunately, HB 14-1295 is not an effective foreclosure justice bill, and neither Mr. O’Connor, nor the Colorado Foreclosure Resistance Coalition chose to support or endorse the legislation. Mr. O'Conner will also be using the opportunity to speak with state leadership about the importance of meaningful foreclosure reform. 

The prohibiting of dual tracking aspect of the bill has several flaws that will still leave the homeowner unprotected from this fraudulent practice. The bill so limits the instances in which dual tracking complaints can be made, it is likely not often going to be brought forward. If a complaint is made, it is left to the bank or their attorneys to state that they are or are not in compliance with the law. If they affirm compliance, there is no opportunity for homeowners to contest the assertion of the banks.

If we could trust banks to tell the truth, we would not need this law; yet, the change to the law once again puts 100% faith in banks to tell the truth in order to correct their not telling the truth.
HB 14-1295 is a sad and frustrating example of our current legislative process. It is the pitiful and meaningless leftovers of past legislation that could possibly have made a difference to the lives of homeowners in Colorado. In the 2013 session, a more meaningful version of foreclosure legislation HB13-1249 was put forward. Recognizing that foreclosure attorneys had stripped due process from our laws in order to expedite the looming foreclosure crisis in a law passed in 2006 (HB06-1387), a team of attorneys, advocates and Representative McCann worked tirelessly on legislation that would do the bare minimum to provide protections to homeowners from fraudulent and unjust foreclosures while having the least impact on our economy and housing market. In addition to stronger versions of the single point of contact and dual tracking language, the legislation addressed a critical aspect of the lack of due process in our foreclosure laws.

Since foreclosure attorneys rewrote the law (the fox watching the henhouse) in 2006, the attorney for a foreclosing party has had the ability under Colorado law to simply sign a statement that the foreclosing party has the right to foreclose. Judges are instructed by the legislation to essentially ask foreclosure attorneys if their client should be allowed to take a person’s home. If the attorney is wrong about the basis for that right (such as the bank does not actually hold the right to the mortgage), the law was changed so they could not be held liable.

McCann’s Mortgage Accountability and Housing Stabilization Act, HB13-1249, would have returned Colorado to a more fair set of laws so that when an attorney signed such a statement, they did so under the penalty of perjury.

As many audits of foreclosures, whistleblower testimony, and even bank authored “how to manufacture documents” manuals have shown, a great number of the statements these attorneys signed and continue to sign are incorrect or fraudulent. HB13-1249’s passage would have meant a significant percentage of fraudulent foreclosures would have been stopped immediately.

The threat of not being able to foreclose without scrutiny of law under McCann’s bill led the banks to lobby our legislators, including the committee chair hearing HB13-1249, Representative Angela Williams, to kill the bill in committee. Having been at the table to write the bill, they were alleged to have gone so far as to complain about language they authored in it. At that point, Williams refused to meet with supporters of the legislation, instead labeling them bullies; other members of the committee she chaired followed her lead to kill the bill when it came before them. Shortly after killing the bill she received an award from the Independent Bankers of Colorado for “standing up to special interests”. 

After a year long campaign by Darren O’Connor, the Colorado Foreclosure Resistance Coalition, and her own constituents to hold her accountable for failing to protect homeowners against fraudulent bank foreclosures, while representing a district that had foreclosure rates of 56% in ten years, Representative Williams felt pressure to support some kind of foreclosure legislation. Once it was clear that any requirements of last year’s legislation that would have significantly compelled banks and their attorneys to act lawfully had been stripped in this year’s HB14-1295, she became a co-sponsor.

A great many other legislators, who refused to stand up and support McCann and the people of Colorado on HB 13-1249 when it could have made a difference signed on to this bill that was so non-threatening to the banks that they didn’t fight against it. They did so in an attempt to convince their constituents, who have suffered foreclosure rates from 4 to 16 times the historic averages, that they care about fraudulent foreclosures. The reality is that they refused to support solid legislation and stand against the banks on behalf of the people of Colorado. They chose to instead support weak legislation that pays lip service to helping homeowners when they know it won’t upset the banking lobby.
With the passing of HB 14-1295 the legislature will likely pretend that they have fixed the foreclosure crisis and move on, not addressing it further. If our legislators don’t push legislation that will truly address the injustice in our foreclosure laws beyond HB 14-1295, then the bill will have done more harm to Colorado homeowners than good. We must not allow that to happen. In the coming election we urge voters to make it clear to incumbent candidates that having chosen to represent banks over homeowners, they do not deserve to represent us in the great state of Colorado.

Those who stood for homeowners and voted for last year’s HB13-1249 were Su Ryden (D) and Thomas “Tony” Exum (D).

Those who voted for banks and against homeowners in killing last years HB13-1249 were Angela Williams (D), Brian DelGrosso (R) , Libby Szabo (R), Dan Nordberg (R), Millie Hamner (D), Paul Rosenthal (D), Clarice Navarro (R), Chris Holbert (R), Tracy Kraft-Tharp (D).

Colorado Foreclosure Resistance Coalition members may be reached at (720) 663-0656