Welcome to The Home Equity Theft Reporter, a blog dedicated to informing the consumer public and the legal profession about Home Equity Theft issues. This blog will consist of information describing the various forms of Home Equity Theft and links to news reports & other informational sources from throughout the country about the victims of Home Equity Theft and what government authorities and others are doing about it.
Friday, April 14, 2017
Judge: Colorado's Now-Defunct Foreclosure King Did Nothing Wrong When Allegedly Pocketing Million$ By Padding Bills, Saying Scheme Reflected An Entrepreneurial Spirit That Capitalized On A Process That Didn't Prohibit It
In Denver, Colorado, The Denver Post reports:
Colorado’s largest foreclosure law firm has landed a major victory in its five-year legal battle against state investigators who tried to prove attorney Larry Castle and his law-partner wife, Caren, headed a money-hungry outfit that for years preyed on a foreclosure system gone wild.
In a 92-page opinion issued Tuesday [April 4], Denver District Judge Morris Hoffman ruled mostly in favor of the Castles, their now-closed firm, The Castle Law Group, and other foreclosure-related companies with whom they did business. Hoffman ruled that the Castles and other defendants did not, as the state claimed, conspire to pad billings and reap millions in illegitimate profits on the backs of the banks they represented, the affected homeowners and real estate investors who later bought the houses at auction.
Hoffman did determine, however, that the Castles failed to tell federal mortgage insurers Fannie Mae and Freddie Mac — two of their biggest clients — about their indirect financial interest in a summons-posting company and for that must pay a civil penalty of $119,500.
The state had sought $16 million to $26 million from the Castles and other defendants in the case. The trial lasted three weeks.
In essence, Hoffman determined the state tried to prove a conspiracy where one did not exist, and that the fees charged by Castle and the other companies with which they did business were merely an entrepreneurial spirit that capitalized on a foreclosure process that didn’t prohibit it. Although the Castles had an obligation to report their profit-sharing to federal mortgage authorities, the larger costs were what the market would actually allow.
“We received the decision yesterday. We are looking it over and evaluating our options,” said Annie Skinner, communications director for Attorney General Cynthia Coffman.
Castle’s lead defense attorney, Larry Pozner, did not immediately respond to a request for comment.
The civil penalty dwarfs a $10 million settlement state prosecutors made in July 2014 with Castle’s biggest competitor, Aronowitz & Mecklenburg, who they sued at the same time for much of the same alleged infractions. The Aronowitz firm closed and later agreed to pay about $2.5 million more to affected homeowners who sued in a separate class-action case.
It also runs against several other settlements the AG’s office made with six other foreclosure law firms, though not as pricey, with each accused of padding billings and profiteering from a foreclosure system that logged unprecedented volume from about 2005 to about 2014.
CBC News: Betrayal of Trust (A CBC investigation reveals how lawyers across Canada have misappropriated and mishandled clients money, to the tune of tens of millions of dollars, or sometimes even charging vulnerable people top dollar for shoddy services)
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