The 40-page lawsuits lay out a well-developed scheme that exploited nearly every facet of the foreclosure process. The law firms left virtually nothing out of their profit center: from title searches and title commitments, to the posting of legal notices and costs to file a foreclosure.
Colorado’s largest foreclosure law firms — The Castle Law Group and Aronowitz & Mecklenburg — were slapped with massive civil lawsuits Tuesday by attorney general investigators who say the lawyers operated a multi-million-dollar scheme that defrauded tens of thousands of homeowners, banks, investors and, ultimately, taxpayers.
Principals of the Aronowitz firm, which is second to Castle in the number of foreclosures handled in Colorado, immediately agreed to pay $10 million to settle the case, and will either sell or close its Denver-based law practice in the next six months, according to copies of the settlement filed in Denver district court.
Castle, led by attorney Larry Castle, is expected to fight what is likely to be a long court battle over an investigation that lasted more than two years.
Attorney general investigations into the practices of other foreclosure law firms in Colorado continue.
It’s unclear how far the reverberations from the Colorado cases will be felt, but several of the illegal practices alleged in the lawsuits are widespread across the foreclosure industry nationwide.
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