Colorado's Attorney General John Suthers has sued two more foreclosure law firms for fraud, accusing them of inflating costs charged to homeowners.
His office, as part of an ongoing investigation, has filed eight civil law enforcement actions against Colorado foreclosure law firms this year, five of which resulted in settlements totaling an estimated $12 million.
The latest civil suits name Robert J. Hopp & Associates and The Hopp Law Firm - including principal Robert Hopp and affiliated title company National Title - and The Vaden Law Firm, including principal Wayne Vaden and affiliated title company City Park Title.
The firms and the affiliated businesses are accused of inflating foreclosure costs charged to homeowners and others in violation of the Colorado Consumer Protection Act and the Colorado Fair Debt Collection Practices Act.
The lawsuit against the Vaden Law Firm alleges that it inflated foreclosure costs for postings, court filings and title beyond the actual cost or the market rate of those services.
The lawsuit against the Hopp law firms alleges the firms routinely collected between $1,200 and $1,400, on average, in premiums for non-existent title insurance policies by ordering title products through their affiliated title company.
"For abusing the foreclosure process for their own profit, eight Colorado foreclosure law firms have now been targets of investigation by my office," Suthers said in a statement. "It is my hope that these actions will result in greater transparency and fairness in the legal processing of foreclosures."
The focus on foreclosure expenses by Suthers' investigation mirrored a separate federal probe by Manhattan U.S. Attorney Preet Bharara's office.
In July, HSBC Holdings Plc agreed to pay $10 million to settle U.S. government charges that it defrauded taxpayers by submitting inflated bills to process residential foreclosures. At least six other banks have disclosed receiving subpoenas as part of the federal probe.