Legal Ethics

Some Colorado law firms billed homeowners for foreclosure suits that weren't actually filed

Some Colorado law firms are preparing statements sent to people facing foreclosure that include charges for lawsuits that were never filed.

The so-called cure notices detail legal expenses incurred on behalf of lenders, missed mortgage payments, interest, late fees and county costs. If a homeowner pays up, the foreclosure process ends, the Denver Post explains. But in at least 126 foreclosures since January 2012, homeowners were billed for the costs of filing and posting notice of suits that were never filed, the newspaper found in an investigation of the records. The newspaper also did some spot checks, and found the overcharges have been a problem since at least 2006.

In some cases, the charges for nonexistent suits were up to $115 higher than the actual cost that would have been incurred for the filing.

Meanwhile, Colorado Attorney General John Suthers has been investigating fees charged by some law firms for posting foreclosure notices, the story says. Some law firms own or partially own companies that perform the service, investigators have alleged in court records, resulting in charges that are up to six times the market rate.

Hat tip to Overlawyered.

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