State of Colorado v. Colt Holdings, LLC, and Jordan Head, an individual.
The State of Colorado entered into an Assurance of Discontinuance with Colt Holdings, LLC (“Colt Holdings”) and Jordan Head (“Head”) to resolve its investigation into alleged violations of the Colorado Consumer Protection Act. Janet Head is a manager and fifty percent member of Colt Holdings, Jeff Head is a fifty percent member of Colt Holdings, and Head is a manager of Colt Holdings.
The State alleges that Colt Holdings and Head acquired title to properties whose owners were behind in paying home owners’ association assessments and facing foreclosure. Colt Holdings and Head obtained title to these residences in foreclosure by making the winning bid at a sheriff’s foreclosure sale, getting a lien assignment, purchasing the property from the home owners’ association, or acting as an equity purchaser. Colt Holdings and Head then evicted the homeowners, came to an agreement where the homeowners left voluntarily, or rented the property back to the homeowners. While many homeowners signed third party authorizations allowing Colt Holdings and Head to access their mortgage loan accounts, they did so with the understanding that Colt Holdings and Head would make the mortgage payments or immediately pay off the mortgage loans. In some cases, Colt Holdings and Head did not make the monthly mortgage loan payments, which led to homeowners incurring late fees or going into default. Moreover, Colt Holdings did not pay off, assume, or otherwise refinance the mortgage loan until they sold the property to a third party – which could be many months later. Thus, while the homeowners no longer occupied or owned the property, they were still responsible for the underlying mortgage payments.
Colt Holdings and Head also acted as equity purchasers when they obtained title to at least three residences in foreclosure. The equity purchase agreements Colt Holdings and Head entered with homeowners, however, did not comply with the Colorado Foreclosure Protection Act in that they did not include numerous required terms and disclosures, explain that homeowners had a three-day right to cancel, or whether Colt Holdings or Head would be assuming the mortgage.
Additionally, in at least four instances, Colt Holdings and Head – in partnership with PoLuxe Homes, LLC and Paola Mendez, who entered a separate Assurance of Discontinuance with the State – offered to assist homeowners in obtaining overbids. The overbid is the difference between the amount a property sells for at a foreclosure sale and the amended bid amount. Although the courts forwarded the overbids to Colt Holdings and Head, they either did not give the funds to the homeowners or did so only after a lengthy delay. The overbids ranged from $8,000 to nearly $116,000.
Finally, the State alleges that Head represented himself as a real estate broker when he was not.
Under the terms of the Assurance, Colt Holdings and Head paid $193,800 to the State to resolve allegations of deceptive conduct. Colt Holdings and Head also agreed to perform the following as injunctive relief: (1) develop a policy for destroying or disposing of personal identifiable information in accordance with Colorado law; (2) cease and refrain from obtaining powers of attorney for homeowners; (3) cease and refrain from obtaining overbids and from assisting (or offering to assist) homeowners to obtain overbids; and (4) not take steps to evict homeowners until after they obtain legal title to the property.
The State will be giving all money obtained to injured homeowners as partial restitution.
See also Pro Luxe Homes, LLC, and Paola Mendez Altamirano aka Paola Mendez, an individual