When Denver real estate attorney Ronald Thompson contacts the Colorado attorney general's office about mortgage fraud or real estate scams, he knows his chances of getting help are slim to none.

"It is not the sort of thing where you can wait weeks or keep calling back to get somebody's attention," said Thompson, who has represented clients in real estate fraud cases. "Things are happening. Foreclosures are proceeding. Evictions are going on."

Thompson said he almost always ends up passing the message along to clients that he gets from law enforcement - the case isn't big enough.

Real estate attorney Robert Goodbinder agrees that law enforcement offers little help to people ripped off in real estate transactions and that consumers must protect themselves.

"My experience in referring people to law enforcement agencies is that it is a waste of time," he said. "A lot of this is very sophisticated and fast moving, and it is hard for the attorney general's office to keep up with it."

For the past four years, Colorado has ranked among the worst 10 states for mortgage fraud, according to the Mortgage Asset Research Institute.

That ranking reflected in part the state's once-unregulated mortgage brokerage industry, something that state Attorney General John Suthers and his consumer protection deputy Jan Zavislan have sought to address.

Suthers was early in convening a task force to tackle foreclosure issues. He also has worked to push through legislation to set practice standards for mortgage brokers and stiffen penalties for appraisal fraud, winning applause from those fighting foreclosures.

"John Suthers and Jan Zavislan at the AG's office are doing a great job combating mortgage fraud and foreclosure fraud," said Zach Urban, a housing counselor in Denver who oversees the state's foreclosure hotline.

Until recently, the legal framework didn't exist in Colorado to rein in rogue mortgage brokers, said Nate Strauch, spokesman for the attorney general's office.

"Most of the statutes we passed regarding mortgage lending are in their infancy," he said. "It is far too early to judge."

The consumer protection unit operates with limited resources. Five attorneys work on a wide range of consumer issues, although the legislature provided funding for another attorney and two staff persons to focus on real estate fraud starting in July.

"It is not realistic to prosecute every single case. We look for patterns of complaints and we look for the worst offenders," Strauch said.

The consumer protection unit has 20 active investigations related to mortgages and real estate, but building strong cases that can stand up in court takes time, Strauch said.

Some attorneys argue that misplaced law enforcement priorities, not just weak laws, have exacerbated the state's high rate of real estate fraud.

Existing consumer protection laws give the attorney general the power to take on mortgage brokers who advertised home loans with low interest rates that quickly got jacked up in a classic bait-and-switch scheme, said Denver real estate attorney John Head.

The attorney general's office subpoenaed 14 lenders and investigated four, but almost a year later it still hasn't filed any civil lawsuits under the Colorado Consumer Protection Act.

Meanwhile, a contracting credit market has most likely killed off many of the questionable players, but not before they placed thousands of borrowers in loans they can't afford, Head said.

"The market caused the lenders to collapse," Head said. "It wasn't anything the attorney general was doing."

Given the severity of the metro area's foreclosure problem and the huge economic losses it is generating, the more egregious perpetrators of fraud need to be punished, Thompson argues.

"The way to take care of all of this mortgage fraud is to prosecute people," Thompson said. "Put a couple of them in jail, not just slap them with fines. Let the other mortgage brokers know they will go to jail."

Georgia, which consistently ranked first among states for mortgage fraud, passed strict laws and backed them up with long prison sentences, said Merle Sharick, a spokesman with the Reston, Va.-based Mortgage Asset Research Institute.

Georgia's attorney general has said he wants people involved in mortgage fraud "to have the same fear as a drug dealer has that they will get caught," Sharick said.

Georgia last year moved down to fourth among states for mortgage fraud.

In other states, sting operations now arrest rogue players at the closing table, taking them out of action.

And in a sign of how seriously the Los Angeles Police Department takes the problem, it has 100 officers dedicated to real estate fraud, Sharick said.

The one formula that has seemed to work in combating mortgage fraud involves three prongs, he said.

"Regulation with law enforcement with prosecution," he said.

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