Colorado Attorney General Sues Big Foreclosure Law Firms

by San Antonio Attorney

Two of the biggest foreclosure law firms in Colorado were charged Tuesday of defrauding investors, banks and homeowners.

The state attorney general’s office on Tuesday filed a lawsuit against Aronowitz & Mecklenburg and Castle Law Group.

The Aronowitz firm promptly settled the case by paying $10 million. The firm will either close or sell its Denver office within the next six months.

Castle will fight what is probably going to be a lengthy court battle over an investigation that went on for about two years.

A total of 150,000 foreclosures in Colorado were handled by the two law firms in the past eight years.

The law firms were charged of connivance between law firms on fixing the price of services fees in foreclosure cases.

According to court papers filed, the law firms had a well-developed system that milked virtually every component of the foreclosure process. They left almost nothing out of their profit center.

The lawsuits claim that the sum of their illicit revenue in less than ten years is probably around $97 million.

Colorado Attorney General John Suthers found the result of the investigation disturbing, he said. The foreclosure system in the state of Colorado needs more oversight, according to the Suthers.

Lawyers for Castle did not give an immediate response to requests for comment.

Attorneys for Aronowitz & Mecklenburg said that the owners, Robert Aronowitz, Stacey Mecklenburg and Joel Mecklenburg, did not plead guilty of the charges.

The Aronowitzes and Mecklenburg are no longer allowed to own any law practice or other business connected to the foreclosure industry.

The law firms were sued for violating the Colorado’s Fair Debt Collection Practices Act and Consumer Protection Act.

The probe started in May 2012, when investigators of the attorney general compiled foreclosure documents showing what the law firms billed consumers. According to the investigators, Castle and Aronowitz handled well over 75 percent of foreclosure cases filed in the state and dispatched the work to companies they controlled or owned.

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