DENVER -- Mortgage brokers in Colorado are under the gun under new legislation aimed at tackling "mortgage fraud," reports the Rocky Mountain News.
Brokers must now register with the state and can have their licenses yanked more easily under new legislation announced today by Colorado's GOP AG John Suthers. Brokers are also forbidden from "compensating, coercing or intimidating a real estate appraiser in order to obtain an artificially inflated appraisal."
Among other measures, the legislation also prohibits lenders and others from attempting to influence an appraiser to raise a property's value and appraisers from submitting "knowingly false appraisals."
Inflated appraisals are costing mortgage originators big bucks in a number of states. Arizona-based First Magnus Financial Corp. recently claimed to have lost $1 million on such schemes in the Kansas City area, as have other companies there. Similar cases have recently popped up in New York, Texas and North Carolina.
Colorado has the second-highest rate of mortgage foreclosures in the nation, although two years ago it was number one.
Most of the judges on the New Mexico Court of Appeals get a failing grade when it comes to the "expansion of liability," according to a judicial evaluation report.
