Initiative 84, a proposed constitutional amendment that would require lenders to prove ownership of property before foreclosing on it, has passed another hurdle in its move toward legalization. On Friday, proponents and opponents met before the state title board to discuss its language, which made it through relatively unchanged. The next step, however, might prove the hardest.
Before the potential amendment makes it to a statewide ballot, the Colorado Progressive Coalition, the body heading up its support, must collect a minimum of 87,000 signatures -- which could cost $200,000 or more, CPC economic justice director Corrine Fowler says. Now that the effort's language has been cemented, the coalition is gathering volunteers and paid representatives to launch its signature drive.
Initiative 84, which was created after House Bill 1156, a similar foreclosure measure, died in committee before making it to the floor, seeks to reverse 2006 legislation that changed the standards for legally processing Colorado foreclosures. Since that year, it has been legal for lawyers to sign a "statement of qualified holder," which indicates ownership without a pattern of proof, and it is no longer mandatory to show a paperwork chain.
If approved, the amendment would require financial institutions to verify ownership of any property through a county note or a certified copy presented during the court stage of a foreclosure.
So far, the language has come under fire from a handful of financial institutions, and while both sides made arguments regarding the initiative's appropriateness on Friday, most were rejected because they did not apply to title board proceedings. In the meantime, the board denied efforts to stage a rehearing to slow down the initiative.
Fowler says the CPC is satisfied with the slight change in wording, which now reads, "An amendment to the Colorado Constitution changing the existing evidentiary requirements for foreclosure of real property and in connection there with requiring the evidence be filed to sufficiently establish a party's right to enforce a valid recorded security interest prior to the foreclosure of any real property."
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The central change here is that now sufficient evidence is required, rather than "complete" evidence. The difference could become a significant one at court in the future.
"Special interests like the Colorado Bankers Association won't be able to come back and change it in future years," Fowler told Westword. "This is going to affect the bottom line of the lawyers and the bankers, and we know that and don't take this lightly. We believe that the foreclosure crisis is the biggest issue our national economy is facing."
More form our Politics archive: "Foreclosure reform: Initiative 84 aims to put fix rejected by House committee in constitution."