John Rebchook is a former Rocky Mountain News reporter with more than 30 years of experience in writing and communications... 
Fines and penalties collected at the real estate division are up 2,470% since Erin Tolll took over in 2006.
The Colorado Division of Real Estate in the first four months of the year collected a record amount of money in fines and penalties.
Through April 29, the divisions collected $303,772.65 in fines and penalties from the industries it regulates, according to information obtained by InsideRealEstateNews.com, through a Colorado Open Records Act request. The division oversees real estate brokers, mortgage brokers, appraisers and conservation easements
Erin Toll, the embattled director of the division, has been on a paid leave since mid-March. She was placed on leave following an investigation of American Home Funding that records show was launched on March 2,the day after Toll had a public dispute with Sen. Ted Harvey, R-Highlands Ranch, an employees of the Greenwood Village-based mortgage company.
Gag order keeps Toll from commenting
Toll is fighting a gag order from her boss, Barbara Kelley, the chief of the Department of Regulatory Agencies from speaking in detail to the media. Her attorney, William Finger of Evergreen, declined to discuss the record amount of fines and penalties collected in 2010. Few observers think that Toll will be returning to her position at the division.
Since being hired as the director in September 2006, Toll prided herself as aggressively weeding out the bad actors in the real estate industry. While welcomed during the heyday of real estate scams and rising foreclosures, some people in real estate believe that she has been unfair to many in a complicated industry, acting as the judge, jury and executioner, and that she was more interested in punishing people than educating them about increasingly complicated industries. In any case, that will change with a new law that will create a board to oversee the discipline of mortgage brokers. Real estate brokers and appraisers already are disciplined by boards.
Fines skyrocketed
One thing that is undisputed is that the amount of money collected in fines and penalties skyrocketed with Toll at the helm.
“I think that (Toll) gets credit for putting the whole thing in place, and launching it and getting it up and running,” said Mike Rosser, a retired mortgage banker who currently serves on the board of a state housing task force. While Rosser said he doesn’t now if Toll will remain in her job, he thinks even if she leaves, the aggressive fine-collecting will continue.
“The system is in place and it will just need to be maintained,” he said. The increased collections, “is probably reflective of what is going on. I wouldn’t read too much into it. It’s what you would expect, so it’s not too surprising. ”
In 2006, the division only collected $11,790 in fines. In other words, in the first four months of his year, the division collected 2,470 percent more than it did in 2006. Mortgage brokers were first required to register with the division and undergo background checks in 2006, and in 2007, they were licensed for the first time. In 2006, was the heyday of subprime and so-called “liar loans,” that at the time were contributing to rising foreclosure rates. Now, most of the foreclosure increases are due to a bad economy, more than bad loan products.
This year’s collections already are 17.9 percent higher than in 2009, and 15.8 percent higher than the previous record of $269,524 collected in 2008. One reason that the division may be collecting more is that it has adopted what is known as the “Expedited Settlement Process,” or ESP, which, allows those fined to agree to pay, without going through other agencies first, such as the attorney general’s office. No one from the DORA returned a call for a comment.
Fines generate revenues, as industry dwindles
Rosser said that in large part, the division requires the collection of fines and penalties to operate, because as people leave the various real estate professions, the division collects less in dues from members.
“I think they are what is called a “self-funded” agency, so I guess at one level they have to collect more in fines, because they do not receive enough from their licensing fees,” Rosser said.
This year, the division has a $5.9 million budget, 3.7 percent higher than the $5.65 million in 2009, and almost 57 percent than the $3.7 million in 2006. So far this year, the fines and penalties account for about 5.2 percent of the entire budget. In 2006, they accounted for only 0.31 percent of the budget.
Toll is the highest person at the division, earning $9,579 a month, or $114,948 a year. The next highest paid person makes $7,837 monthly, or $94,044.
Year Fines/Penalties Collected
2006 $11,790
2007 $261,236
2008 $269,524
2009 $257,680
2010 (as of April 29) $303,773
Contact John Rebchook at JRCHOOK@gmail.com or 303-945-68685.
All your reporting tells me is, in 2006 the middle of the largest 2 years of fraud in the history of real estate, the real estate commission was inept. Why not commit fraud if the only penalty might be $100 fine. I think a lot of brokers will think twice before acting unscrupulous.
I loved that Erin Toll was weeding out the bad eggs in the real estate and mortgage industry. Those of us Realtors that work with integrity and honesty couldn’t be any happier to have them out of the business.
Its too bad that some brokers were above all of this. I know of one broker and his office that the CREC covered up a compliant to protect them. I guess if your friends with Erin Toll, you get a free ride…like the broker getting 4.5 months to reply to a compliant. Fabricating evidence and the CREC investigators doesn't even notice. And its very bad job of fabrication too boot. The AG office isn't doing anything about it…again I guess it is because their friends of Erin Toll. The broker is still a broker after he virtually spit in the CREC face. Nice job CREC… grow some balls or do you need Erin Toll to show you…how sad… what a waste of taxpayers money
Nice – a government agency that has to support itself by setting high fees and by fining those it governs. No published schedule for violations they either find or presume to have found. Nothing that makes the levy fit the seriousness of the violation. Just arbitrary fines; coupled with statements that require the accused to give up any rights to go to court and a government funded attorney general’s office to go against if the accused decides not to waive their rights. Doesn’t that smell badly? How can a 2116% increase in fines between the years 2006 and 2007 be justified? Why hasn’t this been questioned? Where is the oversight? It took a state representative’s alleged violation to blow the lid off this squalor. No wonder Kelley wanted Toll out. She didn’t want to be seen as part of the cover-up. Putrid is the only word to define the CREC. It seems this has gone beyond incompetence – the legislature should be investigating this and the paper, blogs and whatever should be reporting their findings. It is their responsibility. It would be sunshine before the much needed ”Sunset” of the CREC.
When you think of all the crooks who got away with fraud and cheating and lying and out and out theft in this industry for years, $300,000 is just a drop in the bucket. For years fraudulent appraisers and Realtors and mortgage brokers had no fear of getting caught, and if caught knew that they would get a slap on the wrist.
They will get rid of Erin, to the determent of the entire industry, and it won't be long before it will be right back to lax investigations and enforcement.
It has always amazed me how many of the "crooks" in the industry serve on panels and boards and run for office. No wonder we were number 1 so long for fraud and foreclosure.
While Erin could be the "ego" that sucked all the air out of the room, she did a hell of a job during a time when it had gotten out of control. She has only scratched the surface. It is a real shame to lose her.
Barbara Kelley better step up and prove she was worth losing Toll.
"Nice – a government agency that has to support itself by setting high fees and by fining those it governs."
I think it's better to fund an agency thru fining people who commit wrongful acts than the taxpayers. I don't think Aunt Millie should pay to protect the public from predators. Keep up the fines…..
Whoao! nobody told Erin that will be easy, to the contrary I think she has not done enough because today I see some of the same predators out there, My question is what is going on with the investigators? Why they never come hard on the appraisers? Are the same investigators from 2004-2007 working there? careful, because now they can be after you for vengance or they may be harsh (what they didn't do in the early days) tried to make up for is not the bestl or even better they will be harder on everyone (even the inocent) because they want to keep their job.
Watched the best is yet to come. This time I just hope they get rid off the ones still doing the bad practice. Have a nice day
i understand not ONLY have fines have soared which are collected by the state—real estate and mortgage professional fees haved soared,too (helping the funding of state suits). double edge sword–so the state has plenty of money to fund ms toll's legal costs and paid leave?? then, i see DORA placing TV ads encouraging the the public to compalin, complain, complain……this ALL seems extremely inappropriate. ms toll did target some 'bad' apples–though her 'power' took over her proper/fair action becoming an ego driven dynamic. .ms toll needs to humbily exits—faint, if she does—she seems to be on a righeous rampage, the expense of the state and real estate industry.
The fines need to be high to pay for Toll's lawsuit. The taxpayers are paying a huge Toll to keep Toll in office. Bring back Stewart Leach. Put anyone in that actually doesn't hide behind cubicle walls. Toll has no idea how to sell real estate, how to appraise real estate or how to lend on real estate. This is a violation of the Competency provision in USPAP!!!! Fine Toll a usurious Toll of $25,000.
yet, even the record fines, reocord number of actions, head of a department, speaking engagements, testifying before congress, etc. were not enough to satisfy her over-inflated ego. what makes this even worse is that she practiced this with impunity. it is all but impossible to file a lawsuit DORA for harrasment, unfair practices, etc as they are a protected agency. i think they should be held under the same scrutiny as those they pursue.