Mortgage bills win House vote

DENVER - House members gave final approval Thursday to a package of mortgage-industry regulation bills that proponents say will cut down on the skyrocketing number of foreclosures.

The bills do not propose anything as radical as a foreclosure moratorium suggested Tuesday by Massachusetts Gov. Deval Patrick, nor do they help those who have lost houses through foreclosure. But they do aim to corral the shady mortgage brokers who have offered an abundance of adjustable-rate loans in recent years only to see homeowners default on them.

“I think it will go a long way in cutting down on the exotic funding schemes that folks who heretofore have not been licensed have been offering,” said Sen. Peter Groff, a Denver Democrat and sponsor of two of the four major mortgage bills this session. “I think the biggest change you’ll see is hopefully a more conscious industry that knows their behavior is being monitored.”

Here are the ideas that were approved by overwhelming majorities:

- House Bill 1322 regulates the professional behavior of mortgage brokers and other parties involved in real estate transactions.

- Senate Bill 85 gives the Division of Real Estate more leeway to crack down on deceptive practices and allows revocation of registration for brokers prohibited from practicing elsewhere.

- Senate Bill 203 requires state licensure of mortgage brokers.

- Senate Bill 216 requires mortgage brokers to act in good faith and fair dealing.

Colorado was among the highest states for foreclosures last year, and legislators who represent poorer neighborhoods said they needed to help people who received bad mortgages and lost their homes.

Because the state cannot regulate mortgages purchased over the Internet, none of the bills deal with that subject, Groff said.

Sen. Ted Harvey, R-Highlands Ranch, has been one of the biggest opponents of the measures, arguing that the bills do nothing about regulating which kinds of loans can be offered to home buyers and, therefore, don’t solve the foreclosure problems.

Groff said, though, that as long as the industry is more closely regulated, boards that oversee it can crack down on financing schemes that are unethical if not outright illegal.

CONTACT THE WRITER: (303) 637-0613 or ed.sealover@gazette.com