It’s back to the district court for the foreclosure case that has the potential to impact the rest of the country’s procedural handling and oversight in foreclosures.
On Tuesday, the Colorado Supreme Court ruled that a Denver District Court judge was wrong to bar evidence submitted by Colorado Attorney General Cynthia Coffman in the State v. The Castle Law Group. The Tennessee-based Castle Law Group, run by the husband-wife attorney duo of Larry and Caren Castle, is under investigation for deceptive practices in foreclosures during the height of the housing collapse. The Castles claim that the fees were “actual, reasonable, and necessary” and not deceptive because they were disclosed to lenders and the public.
However, the Colorado Supreme Court disagreed and wants the fees to be included in the investigation, stating: “Disclosure of a price charged does not automatically insulate a party from claims that the price is deceptive.” The court claims it “is directly relevant” to show what other businesses typically charged for the same service.
Former Colorado Attorney General John Suthers began the investigation in foreclosure billing practices back in 2012 when The Denver Post investigated and revealed that law firms were fraudulently charging homeowners for foreclosure filing fees of cases that never actually existed. The state sued the other top foreclosure law firm, Aronowitz & Mecklenburg, which settled and eventually closed its doors.
When that case settled, the attorney for Aronowitz claimed that lawyers use affiliated businesses to handle foreclosures as “common practice.” He also noted that: “Many foreclosure law firms, especially those of any size across the United States, are likely at risk for these very same issues.”
In the Colorado Supreme Court’s ruling, the court contends that the trial court voluntarily dismissed one of the Consumer Credit Protection Act (“CCPA”) claims and is remanding the case back to the district court level to see if it results in better oversight in the foreclosure process.