Foreclosure: Initiative 84 dies to make way for a legislative bill

Initiative 84, a proposed ballot measure that would have reformed the state's foreclosure process, is effectively dead -- but it will enter a third life in the next legislative session. Five weeks before 87,000 signatures were due at the Secretary of State's office -- and with only 25,000 in the bag -- sponsors at the Colorado Progressive Coalition rerouted their resources to a more hopeful option: The Colorado Legislature. This will be the second time the CPC has pushed a foreclosure measure: Earlier this year, House Bill 1156 died before making it to the full chamber.

Supported by Representative Beth McCann and Senator Michael Johnston, HB 1156 targeted transparency inside the system. Organizers hoped to effectively reverse a 2006 law that made it legal for lawyers to sign as proof that lenders meet the requirements to foreclose on a property; instead, the bill would have required proof of ownership via paperwork, and it sought to establish a standard of judicial oversight, requiring a judge to read that paperwork before making a ruling in any foreclosure hearing.

But 1156 died in committee in April: Critics complained that it was another law directed at foreclosure reform in a line that already had too many, and they went so far as to target its sponsor, the CPC. They suggested that a group with fewer such proposals might have earned a more positive response, despite the fact that HB 1156 marked the CPC's first foreclosure effort.

Not anymore. After the death of HB 1156 the CPC expanded its strategy, pushing a proposal to amend the Colorado Constitution.

With Initiative 84, which would also have required proof of ownership before foreclosure, the group and other members of its Campaign to End Unjust Foreclosure hoped to let the people vote on the matter, not legislators. But the initiative required a minimum of 87,000 signatures of support before it could make a statewide ballot, and at the end of June, after several battles with opposition, only 25,000 had been secured. Early in the group's efforts, sponsors planned to hire outside firms to assist with the collection of signatures, but the funds to do so never came through.

"It was taking a significant amount of our time and money," CPC Economic Justice Director Corrine Fowler says. "We were expending a significant amount of resources on this ballot initiative. We talked to our coalition partners and Representative McCann, and we realized that gathering 25,000 signatures is enough civic engagement that we can cover ourselves in the legislature."

So next legislative session, the group will start the third round of this fight with its second bill proposal. Although the first attempt ended quickly, Fowler says awareness of local foreclosures has increased in the intervening months -- and so has support to stop them. The CPC continues to collect new stories every week, she says, and its partners in the Colorado House and Senate feel more confident in a bill's potential for success this time.

"With 1156, the problem was so hidden and difficult to define, and nobody in the state knew this was happening," says Fowler. But while she believes that has changed, she remains skeptical about some elements of statutory reform: "I still have my concerns that statutory changes are not permanent, so I hope we can ring a very strong bell. I hope we don't have to continue to protect the people of Colorado year after year, which has always been the problem with statutory change. Because the banks will continue to oppose us with all of their might."

In the meantime, the CPC will continue to work with Debra Fortenberry and Stephen Brunette, the Colorado Springs attorneys who drafted HB 1156, as they create new language. Fowler hopes to adapt the new bill to include greater accountability, including punishments for financial institutions that process loans fraudulently. "I'd like to make it even stronger than the initiative, which was very simple," she says. "We have a lot of time to explore that."

More from our Politics archive: "Foreclosure: Initiative 84 passes latest hurdle with Supreme Court's okay."

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Kelsey Whipple
Contact: Kelsey Whipple