Colorado Judge Gives Preliminary Green-Light To Probe Into Alleged Inflated Costs Scam Targeting Foreclosure Mills, Ordering Attorney To Fork Over Paperwork Requested By State AG

In Denver, Colorado, The Denver Post reports:

• With a handful of foreclosure lawyers listening intently from the back of the courtroom, a Denver District Court judge Thursday ordered one of their colleagues to comply with a state investigation into their billing practices — after denying efforts to close the case from the public.
  
  Judge Edward Bronfin said lawyer Robert Hopp Jr. must gather the paperwork subpoenaed by Attorney General John Suthers' office in its investigation of lawyers specializing in foreclosures and provide it within 60 days.
  
  Before that, Bronfin denied Hopp's request to keep the case from the public, saying the investigation had an "overriding public interest" that superseded Hopp's privacy rights.
  
  Hopp had complied somewhat with attorney general subpoenas issued months ago but has held back some of the most critical documents investigators said they need to determine whether the lawyer was padding his bills, Assistant Attorney General Erik Neusch said in court. Hopp said the investigation covers "about 10,000 files" going back at least five years.
  
  "The scope of the investigation is very simple: why (attorneys) charge more than their actual costs," Neusch told Bronfin. "Yet we can't get any of these law firms to give an answer to that."
  
  The investigation extends to at least a half-dozen law firms that have filed foreclosures in several Front Range counties, according to people familiar with the probe. The Hopp Law Firm was one of the state's most prolific in filing foreclosures.
  
  Hopp filed for personal bankruptcy in June after closing his law firm in April.
  
  Investigators are poring over the bills that lawyers submit in a foreclosure case that outline expenses for which they are entitled to be reimbursed.
  
  Investigators say in court documents they found records indicating those expenses — particularly the costs to post a pair of required notices advising homeowners of their rights — were inflated, sometimes by nearly 10 times the amount actually spent.
  
  The costs are paid by homeowners looking to keep their house from foreclosure, by the foreclosing bank or by the buyer of the property, usually an investor, at public auction.

Source: Denver judge orders foreclosure lawyer to comply with investigation.