Colorado legislature tries to hold brokers accountable for bad loans

Finally a state legislation that is stepping up in trying to hold some of the mortgage brokers responsible for the bad loans they approve. I have said over and over that the responsibility lies with the mortgage brokers because they ultimately no if the homeowner can afford the mortgage. Far too many brokers or carelessly approving homeowners for mortgages they know they can't afford and they know they will end up in foreclosure. If we can start holding these brokers accountable the foreclosure rate will undoubtedly start to decline. This means that some homeowners will not be approved to own a home, but in the long run they will be much better off because they will not have a foreclosure on their record.

- This is an excerpt from an article posted by the Denver Post, by David Olinger - Sunday, Feb. 25, 2007. “Two bills aimed at reducing Colorado's foreclosure epidemic will be announced at a news conference Monday.
Rep. Rosemary Marshall, D-Denver, will propose legislation that increases the accountability of mortgage brokers and imposes penalties for false advertising or luring borrowers into loans they cannot afford….
…For much of last year, Colorado's foreclosure rate led the nation. The Denver Post examined the causes of the foreclosure wave in a 10-part series, Foreclosing on the American Dream. The Post found, among other things, that most foreclosure victims had bought homes with loans that required no down payment, and some signed loans that required them to spend more than half their monthly income on their houses.
Marshall said her bill would require brokers to "recommend mortgage products that take into account a buyer's financial status" and "prohibit them from misleading or defrauding borrowers by falsely advertising loan terms." The "enforcement teeth," she said, would include fines or revocation of the right to conduct business in Colorado…”www.denverpost.com