Are Colorado Law Firms Overcharging People in Foreclosure?

Are people being charged inflated legal fees when they get foreclosed on? Well the Colorado Attorney General would like to know more and has filed suit for law firms to fess up.

The Colorado Attorney General John Suthers is apparently concerned about law firms that handle foreclosures in the state. While fees are allowed to be passed on they are limited to what was actually paid for the service.

“Law firms that are under scrutiny by Attorney General John Suthers allegedly even increased the amount they say they paid the state for a district court hearing to auction a property, a fixed cost set by statute, investigators say in court papers. And in at least one case, investigators say a law firm regularly charged the inflated fee even though its client was a state agency that by law doesn’t pay it.

In the worst-case scenario, the amount law firms overcharged taxpayers and homeowners statewide in the past decade would reach into the tens of millions of dollars. Potential penalties are unclear because no charges have been filed.”

“In another, investigators said the law firm “performed postings in-house and then represented that its actual costs were $150 each to post two notices to a homeowner’s door during the foreclosure, even though the market rate for such postings is $25.”

Investigators say a process server hired by one of the law firms generated two sets of bills — one showing the amount the firm says in court papers it paid and another privately reducing the charge by half.”

“Three law offices — Vaden Law Firm; Medved, Dale, Decker & Deere; and the Hopp Law Firm — refused to comply with the attorney general’s subpoena, saying the information was either protected by attorney-client privilege or outside the bounds of investigators’ authority.
The attorney general filed lawsuits against all three.

A fourth law firm — Aronowitz & Mecklenburg, one of the state’s busiest foreclosure firms — sued Suthers, but a Denver District Court judge has suppressed that case from public view at the law firm’s request.”

You can read more of this story on The Denver Post.


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