Lawyer doesn't see Erin Toll's victory as helping consumers

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Earlier today, I blogged about Erin Toll, winning a court ruling that said the Colorado Division of Real Estate can subpoena bank rules when conducting an investigation into a alleged mortgage fraud that involves an unlicensed broker.

Toll called the ruling a victory for consumers.

But Wayne Vaden, the lawyer representing Daniel Gordon, the mortgage broker at the heart of the lawsuit, disagrees. Vaden said Gordon has not yet decided whether to appeal the decision by District Court Judge John Madden IV.

“I can say we are disappointed by the ruling,” Vaden told me in a cell phone interview, while I was shopping at King Soopers this evening. “We disagree with the ruling.”

And Vaden did not agree with Toll’s assertion that is is a victory for consumers.

“I don’t see how consumers are protected at all,” Vaden said. “This does not involve consumers. Nothing has been alleged that consumers were hurt or lost money. I could maybe see it if this case involved millions of dollars, but it doesn’t. It is not a serious crime. It involves not having a license. It’s like if you were caught driving a car without a driver’s license. You get a driver’s license, end of story.”

I asked Vaden if he thought it was a “fishing expedition,” to perhaps discover more serious violations.

He indicated if it is, that would have a chilling effect on the profession.

“Who would want to become a mortgage broker, or enter any profession, where the government could look at all of your personal records? We do think such a broad search is an invasion of your privacy. That is the heart of the matter.”

At the very least, a search of bank records during such an investigation should be very specific, perhaps looking at transactions during very specific dates or amounts paid to certain individuals. Personal transactions that had nothing to do with the investigation should be redacted, he said.

Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.

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