Three Colorado law firms accused of inflating foreclosure costs charged to homeowners and padding bills with unauthorized expenses agreed Thursday to settle lawsuits filed by outgoing Colorado Attorney General John Suthers.
Medved, Dale, Decker & Deere; the Law Office of Michael P. Medved; and Janeway Law Firm were accused of charging improper and inflated costs for title products.
The three firms announced their settlements simultaneously, agreeing to pay the state a total of $1.8 million in restitution, costs and fees. Each also agreed to pay another $350,000 suspended pending compliance with the deal.
The settlements end a two-year investigation into alleged foreclosure fraud by Colorado law firms that began following several Denver Post articles. The investigation already took on the state's biggest foreclosure outfits - The Castle Law Group, which continues to fight the case, and Aronowitz & Mecklenburg, which paid $10 million to settle and agreed to close.
In the latest settlements, attorney Michael Medved and Tracie Castanon, the business manager at The Law Office of Michael Medved, agreed to pay $1 million - without admitting wrongdoing - to settle allegations that they followed the lead of the state's biggest foreclosure law firms and overcharged for handling foreclosures. Medved used Wise Posts, a company owned by his sister, Beth Maloney, and her husband, Patrick Maloney, to place legal notices on foreclosed properties, and then upcharged title search reports through a company in which it held a financial interest. That company, Foothills Title and Escrow, was sold to a law firm Medved later joined.
"We continue to uncover improper and deceptive billing practices by foreclosure law firms operating in Colorado," Suthers said in a statement. "These inflated costs were passed on to homeowners trying to save their homes from foreclosure, successful bidders for properties at foreclosure sales, and to investors and taxpayers."
The principals of Medved Dale Decker & Deere - Toni Dale, Holly Decker and Heather Deere - in a separate case from Suthers' office, agreed to pay $150,000 to settle allegations it upcharged by 175% the costs of title search reports through Foothills, which also was a named defendant.
Janeway Law Firm, led by Lynn Janeway, was accused of overcharging on a pair of foreclosure-related fees, one of them by five times the amount. The actual costs, for a trustee sale guarantee and cancellation of a title commitment, were much lower, according to the AG's lawsuit.
Janeway, who used to work for Larry Castle of The Castle Law Group, also allegedly overcharged the costs to post legal notices on foreclosed properties, a practice she reportedly stopped.
Janeway, which also does foreclosure work for the Colorado Housing and Finance Authority, settled for $650,000 and and additional $350,000 was set aside in lieu of compliance.