The state today posted a job description to fill Erin Toll's former job as the director of the Division of Real Estate.

Vote at the bottom of this blog on whether you think the next real estate division director will be as high-profile as Erin Toll. Also, information on how to apply for the job is at the end of the blog.

The person hired to replace Erin Toll as the director of the Colorado Division of Real Estate can expect to make about $80,000 to just under $121,000 annually, according to the job posting for the position released today.

Applicants have until 5 p.m. on July 12 to submit an application for the job, which has a salary of $6,662 to $10,067 a month, which equates to an annual salary of $79,944 to $120,804. Toll, who had been placed on a paid leave of absence following a highly publicized confrontation with a mortgage broker, State Sen. Ted Harvey, (R-Highlands Ranch), recently received about a $55,000 settlement agreement with the Department of Regulatory Agencies, which oversees the real estate division. Toll, now a real estate broker with Perry & Co., was paid slightly less than $115,000 in her position.

Observers said they expect a large number of people will compete for the job, especially considering the softness in the real estate industry. Several people think the Department of Regulatory Agencies, or DORA, will want someone less high-profile than Toll, who perhaps received more press on a fairly regular basis than any other department head of a state agency. After being placed on paid leave last spring, a great deal of criticism and anger against her surfaced from some people in the real estate industry, although others also lavished praise on her for aggressively going after the “bad actors” in the industry.

Director job carries a lot of responsibilities

The job requires overseeing the day- to-day operation of about 49 employees. The division , regulates real estate licensees, mortgage brokers, real estate appraisers, subdivision developers and conservation easements.

The director “analyzes, interprets and renders decisions on complex issues,” according to the job description. “One of the critical responsibilities,” of the director is to determine the extent to address regulatory or administrative issues and work closely with the of Real Estate Commission, the Board of Mortgage Loan Originators, the Board of Real Estate Appraisers, and the Conservation Easement Oversight Commission, according to a description of the duties. The director also needs to advise the executive director of DORA; testify and advise legislators when requested; represent the division publicly; and serve as the media contact.

The requirements include a college degree in business administration, pubic administration or a closely released field, as well as six years of experience as a senior or high-level management position in a regulated industry. A law degree is preferred.

Ideal candidate knows real estate

Observers said that the ideal candidate also should be well- versed in a wide variety of real estate practices.

“I think my ideal profile of a person for the job would be somebody who has a fundamental knowledge of all the parts of the real estate industry it oversees,” said Mike Rosser, a long-time mortgage official and consultant. He said the person will need to understand federal laws pertaining to real state and lending, as well as state statute.

Asked if he thought the state would want someone as high-profile as Erin Toll, he said he would assume that they want someone who runs the operation effectively and fairly, while being “transparent” to the public.

“I think I would characterize that question a little differently,”Rosser said. “I think there is a distinction there between courting the public light or getting the spotlight on you, but still getting your message out to the public.”

Marshall qualified, not interested

Former State Rep. Rosemary Marshall, who had received an award from Colorado Bankers Association for sponsoring consumer protection issues, which resulted in the passage of new laws regarding penalties for Identity Theft and Predatory Lending, read the qualifications online for the job after being contacted by InsideRealEstateNews.

“Clearly, with all my state government and management and state organizational work, I am really familiar with that industry,” Marshall said. “After reading through it, I would say there is not any part of it that I’ve missed. When I was in public office, I got along real well with consumes and people in the real estate and financial industries. But while you never say never, it is not on my radar.. .I have not been approached about the position and no one is inviting me to apply. So I would have to say at this time, I have no interest in that job.”

However, she thinks there will be a large number of people applying for the job, both from within the division and outside.

She agreed with Rosser than the ideal candidate would be very knowledgeable about every aspect of the real estate industry. And she said the person needs to be “political savvy” and be able work well with state legislator.

“I do think it is gong to be a very different environment,” for Toll’s successor, Marshall said. “The division is still committed to consumer protection and protecting people from unscrupulous people in the industry, and still will have to make sure people in the industry follow all of the laws regarding licensing. But I think the person who does this next, is going to be under a different kind of scrutiny.”

Although Marshall is not interested in the division director, she would like to serve on the new board that will oversee mortgage brokers for the first time. She said she hopes to be appointed to the board by Gov. Bill Ritter.

Williams says Ritter’s administration plays politics

Kathi Williams, who last year resigned as the head of the Colorado Division, said she thinks the Gov. Bill Ritter administration wants someone more low-key than Toll as the next director of the real estate division.

“My experience with this administration, is they want somebody who is going to follow orders,” said Williams, a Republican legislator in Adams County from 1984 to 1990. “I don’t know what Erin Toll did or did not do a far as Ted Harvey, and there was some criticism for how aggressive she was, but I would really have thought that the (Ritter) administration would really have come down on her side. I do not think they want people like Erin Toll. They pretty much want people who fly under the radar. I know in my position, you would have thought that (the Ritter administration) would have been very grateful for all the federal dollars we brought in for affordable housing and launching the Colorado Foreclosure Hotline. Even though we did things that made the administration look good and reflected well on them, we not get anything from them but being castigated. I don’t know how much of that Sen. Harvey issue was a driving force, but I know every time my name appeared in the press, I would be criticized by my boss. But since I was making them look good, you would have thought they would have been happy as a clam. They wanted to fire me, but they couldn’t, so they just made my life miserable.”

Although she was a Republican under a Democratic governor, she said that shouldn’t have been an issue. Evan Dryer, spokesman for Ritter’s office, did not immediately respond for a comment. “I dropped all of my Republican politics when I became the housing director and focused on affordable housing issues,” Williams said. “And even when I was a legislator, thought I was very bi-partisan.”

While Rosser and Marshall thought the salary range for the next director was very attractive, Williams said she was making about $125,000 when she left her position as the head of the housing division. “I think what they might have going for them in finding a very qualified person, is that the current state of the real estate industry,” Williams said. She said people who might not have considered the job at the proffered salary during the go-go days of real estate, might find the salary very enticing today.

Below is information regarding applying  for the job as executive director of the Colorado Division of Real Estate.

To access the application on line,  go to this link.

Submit all application materials to:

Department of Regulatory Agencies

Human Resources

1560 Broadway, Suite 1550

Denver, CO 80202

If you have any questions or need additional information, contact Carol Stahlberg at 303-894-2360.

NOTE:  Faxed or e-mailed applications are not accepted.

To contact John Rebchook go to JRCHOOK@gmail.com or 303-945-6865.

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Erin Toll Glover has resigned as the director of the Division of Real Estate and will sell homes for Perry & Co.

Take the Toll Polls at the bottom of the story

Erin Toll has resigned as the director of the director of the Colorado Division of Real Estate.

Toll, who has been embroiled in a controversy for the past three months, officially resigned on Monday, announcing that she will become a real estate agent with Perry & Co. In other words, instead of enforcing rules against real estate brokers, she will now become one.   Toll, a lawyer, already has passed the real estate exam.

“My primary focus for more than a decade of public service has been as a consumer advocate,” Toll wrote in her letter of resignation. “Given the controversy that has distracted the division from its mission for the last several months, I believe that the best interest of the consumers and citizens of the State of Colorado is served by this action.”

Controversy dogged Toll

The controversy began following a confrontation with Sen. Ted Harvey, R-Highlands Ranch, on March 2 at a state committee meeting. The day after, Toll “officially” launched an investigation of Harvey, a mortgage banker, and his company, American Home Funding, although there is some dispute when the investigation over alleged deceptive advertising began. In any case, soon after, Toll’s boss, Barbara Kelley, the executive director of the Colorado Department of Regulatory Agencies, put Toll on paid leave without explanation. But before that, DORA announced there never was an investigation of Harvey. In addition to real estate brokers and mortgage brokers, the division oversees appraisers and conservation easements.

Toll, Kelley in opposite corners

Kelley also placed a gag order on Toll, which prevented her from giving her side. Toll responded with whistle-blower suits against Kelley and DORA, and other legal actions. Kelley has also declined to comment publicly. But in a legal document obtained by InsideRealEstateNews, Kelley wrote that the basis for Toll investigating Harvey was “determined to be factually inaccurate; demonstrated poor professional judgment; and was a release of information (true or false) that possibly violated the Department’s Media Policy.” Kelley said that Harvey has “not been and is not now the subject of any investigation,” by the real estate division. Kelley went on to write that Toll showed a “conflict of interest” regarding Harvey, “as well as creating the risk for damaged credibility of the Division of Real Estate” and DORA. Toll, in a legal fight, unsuccessfully tried to get her job back with all her prior responsibilities. Toll was paid just under $115,000 a year as director.

But a joint press release from Toll and Kelley released in conjunction with Toll’s resignation,  “had this to say: “Ms. Kelley expresses her sincere appreciation for the service that Ms. Toll has given to the state as a passionate consumer advocate. Ms. Toll, in her letter of resignation, has expressed her gratitude to the exceptional staff at the Division of Real Estate, representatives of the Attorney General’s office that have provided counseling on legal matters and to industry representatives serving on boards and task forces.” Earlier, Toll’s attorney in the matter, Bill Finger of Evergreen, argued that the attorney general had a conflict of interest in representing Kelley and DORA, as it had represented Toll in numerous matters in the behalf. The attorney generals office removed itself from the matter, and hired a private attorney at $200 per hour instead.

Toll elicited strong opinions

In the wake of Toll’s woes, it was clear that she was a lightning rod for strong opinions. She was often criticized by readers of  InsideRealEstateNews.com and the Denver Post letters as presuming people were guilty and acting as the judge, jury and executioner. Some even called her “Troll” and attacked her as being unfair. Others, however, came to her defense, noting that she had taken more actions against “bad actors” in real estate than any other regulator in Colorado’s history.

Selling home dream for Toll

Toll did not waste any time in hitting the ground in her new profession. She already has created a Web page at Perry & Co. that notes she has testified before Congress on real estate scams; has been named one of the top five most ethical real estate professionals in Colorado; and was a runner-up for the top business person of the year. “Let an expert who knows the ins and outs of the real estate world from all angles buy or sell your home,” according to the site, ErinTollGlover.topseller.net. Glover is her married name. There are no listings yet on her page.

In her own words, this is how Toll described her decision to become a real estate broker, as well as what she considers some of the work she is most proud of since being named the director in the fall of 2006. She does not address the circumstances that led to her being disciplined.

“I have decided to pursue a dream of mine to buy and sell homes for consumers,” Toll wrote in a statement. “I will be affiliated with Perry & Co, a homegrown boutique real estate brokerage that’s been specializing in luxury homes for 40 years. I entered the real estate business when I was only 16 years old. I searched titles for a title insurance company while I was still in high school. Since that time, I stayed involved with real estate while working for the state for over a decade. In 2005, I uncovered a real estate scam involving real estate companies, builders, banks and title insurers. The regulatory action led to more than $45 million in restitution paid back to consumers across the country, and an invitation to testify before the US Congress in 2006.

“‘As the Director of the Division of Real Estate, in 2006 I assisted in drafting and implemented the state’s first laws governing mortgage brokers. In 2009, the Division uncovered significant problems that threatened the conservation easement program designed to protect Colorado’s scenic beauty and wildlife habitat. I testified in support of, and implemented the country’s first conservation easement legislation.

Toll praises staff, state

“I am proud of my many accomplishments while serving the citizens of the state of Colorado. These successes would not have been possible without the hard work of an exceptional and dedicated staff, and Governor appointed commission and board members. In addition, I worked hard to forge strong industry relationships and created several task forces where mortgage lending experts, and education providers assisted the Division in creating appropriate industry standards.

Time to move on

“But is time for me to move on. The last 2 ½ months have given me time to reflect on my ultimate career and family goals. Working for the state does not allow me to achieve goals that are very important to me including being present for my family and protecting consumers from abuse in real estate transactions. I intend to transfer the passion I have for real estate work and consumer advocacy to my new role as an associate broker with Perry & Co. I can be found in the company’s Cherry Creek North office between 3rd and Fillmore

“With this resignation, I want to express my gratitude to the exceptional staff at the Division of Real Estate, the representatives of the Attorney General’s office that have been such good counselors and attorneys for the Division of Real Estate and the industry representatives serving on boards and task forces. It has been my great honor to have served the citizens of the State of Colorado. I have made many dear friends at the Division and in State government. Together, we have had numerous successes implementing legislation that oversees loan originators and conservation easements, as well as real estate brokers and appraisers.

“I will miss the projects, the teamwork and the friendship at the Division and the Department. I wish everyone all the best, as they continue their important consumer protection mission.”

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John Rebchook is traveling this week, but you can leave a message with him at JRCHOOK@gmail.com or 303-945-6865.

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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.

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Erin Toll is a subject of a Denver Post editorial.

The Denver Post today has an editorial on Erin Toll. The editorial under the headline, Toll: Dedicated servant or overzealous administrator? re-caps what has transpired in the Toll case since she was placed on paid, administrative leave in March. The editorial argues that “public is owed a fuller accounting of Toll’s actions in order to understand whether she was an “out-of-control administrator, or victimized for being an ambitious public servant with a strong reform agenda.” If you initially missed the editorial, click on the highlighted link above.

For a related story, please visit Did Toll-Harvey dispute spark investigation?

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

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And on another issue, Toll has received the second-highest ranking on each of her four performance reviews since she became the director of the Division of Real Estate, but has yet to receive one from her current boss, Barbara Kelley, head of the Department of Regulatory Agencies. Kelley placed Toll on paid leave in March, following a publicized investigation of American Home Funding and one of its mortgage brokers, Sen. Ted Harvey, R-Highlands Ranch. Toll is currently being paid her salary of $9,579 a month, or just under $115,000 annually, DORA said in response to a Colorado Opens Acts Request by InsideRealEstateNews.com.

The Attorney General’s office, as InsideRealEstateNews first disclosed, hired private attorney Cathy Greer to represent the Department of Regulatory Agencies in Toll’s case.Bill Finger, Toll’s attorney, argued that the attorney general had a conflict of interest in representing DORA, as it had represented Toll on numerous occasions.While $200 per hour, a rate negotiated by the state last year, is not expensive by lawyer standards, it far exceeds Toll’s salary.If Greer billed the state 40 hours a week at $200 per hour, that would come to $8,000 per week. In other words, in one week Greer would earn 83.5 percent of what Toll makes in a month. And if Greer charged 40 hours a week for an entire year, she would end up earning $416,000, about 3.6 times Toll’s salary. Although she Greer very well may not bill 40 hours a week, there is no cap on how many hours she can charge or a cap on the maximum she can bill.

It’s the price you pay

High costs simply comes with the territory, said Byron Koste, the outgoing executive director of the Real Estate Center at the University of Colorado – Boulder.

“It’s like going to the doctor,” Koste said. “Once the doctor starts working on you, don’t you think he is going to get paid more than you? And $200 per hour is actually a fairly cheap attorney. A lot of them charge $350 or $400 or more per hour. The legal route is expensive, whether it is a divorce or a grievance issue.”

Koste said the state “can’t shop around looking for an attorney who earns less than Erin Toll. What she makes is immaterial. It has nothing to do with the going rate of a private attorney.”

High legal costs can lead to settlements

That said, in the “real world,” the cost of a lawsuit can result in a settlement, he said.“It isn’t just the state,” Koste said. “Any lawsuit gets very expensive and you are incentivized to take that into consideration. On the corporate side, it is a hard pill to swallow to make the economic position to settle when you feel you are in the right.”

Bill Finger, Toll’s attorney, asked how much Greer is being paid.

“$200? She’s cheap,” Finger quipped.

Could it be settled without running up the legal bill?

Finger, however, said even that expense might be avoided if Barbara Kelley, the head of DORA, would sit down with Toll.

“Repeatedly, Erin, through this office, has invited the department head to meet with Erin and resolve this matter,” Finger said. “And the department has refused to do that. The grievance procedure allows a face-to-face meeting, and even encourages resolving grievances this matter. Barbara Kelley has chosen not to do this. The best way for the state to resolve this is to have a meeting with constructive dialogue.”

Toll received high marks in previous reviews

Meanwhile, InsideRealEstateNews.com, obtained summaries of all of the performance reviews Toll has had since taking the position in 2006. The state, however, denied releasing the entire reviews under a Colorado Open Records Act request, but only gave the time period and overall rating.

The first rating, from Sept. 5, 2006 to March 31, 2007, Toll received a “Very Good” rating, the second of four performance levels at the time. Only “Peak’ was higher. Rico Munn, the DORA director before Kelley was appointed to the job last fall, declined to comment.

A “Very Good,” means she: “Accomplished performance; consistently exhibits the desired competencies effectively and independently while frequently exceeding expectations, standards, requirements, and objectives of the job assignment. It also means that her work had a “documented impact beyond the regular assignment and performance objectives directly support the mission of the organization.”

The Very Good category also means that Toll was ‘innovative, above standard, commendable, anticipate opportunities, and prevents problems.” It also is a category for someone exhibiting “higher production levels.”From April 1 2007, through her latest review on Oct. 31, 2009, she received a “Successful” rating, which is only exceeded by the “Exceptional” category.

Among other things, a “Successful” rating means the person “exhibits competently in the work behaviors, skills and assignment for a job. Consistently meets, and on occasion may exceed, all expectations; reliably performs the job assigned; exhibits “behavior competency: meets customer expectations; and has a “positive attitude and ability to adapt well to change.’

Asked what he thought of her performance ratings, Finger, Toll’s attorney said: “They speak for themselves.”

It’s unclear whether Kelley plans on reviewing Toll’s performance. DORA left Toll’s latest appraisal period, from Nov. 1, 1009 to March 31, 2010, blank. Reviews are mandated by the state.

“We do not know at this time,” said Chris Lines, DORA spokesman.

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

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Today, in response to inquiries from the media whether “logging” the investigation on March 3, was connected to the legislative events on March 2, Finger issues a press release on Monday. Barbara Kelley, DORA’s chief who forced the leave of absence on Toll, wrote in a legal document that Toll’s statement on Harvey being investigated was “factually inaccurate; demonstrated exceedingly poor professional judgement; and was a release of information (true or false) that possibly violated the Department’s Media Policy.” Kelley went on to write that Toll’s actions may have damaged the “credibility” of the real estate division and DORA.

Gag order limits Toll’s responses

“It is Erin’s desire to freely and frankly discuss this matter because Erin is a firm believer in open government,” Finger wrote in the release. “Unfortunately, as everyone should know, Erin has been gagged by an order of the Executive Director of the Department of Regulatory Agencies. She is allowed to say “no comment” and that “she has done nothing wrong.” Thus, Erin’s official comment to the press is that “she has done nothing wrong” and “no comment.”

But Finger went on to say as Toll’s lawyer that he wants to “assure the press and the public that there is no connection between the events a the legislature and process of opening an investigation.” He said that the “department and the press are fully aware” that last fall the division began looking into advertising practices of American Home Funding’s licensees and the companys’ principals concerning its advertising. Reportedly, the advertising looked like government documents when they were not.

“Thus, individuals at the company knew of the concern long before March 2, 2010,” Finger said. “There is also documentary evidence that Division’s concerns relating to the advertising did not end with that contact.” He said that a Feb. 1 communication from a division staff member “demonstrates this fact.” He said Toll, after being alerted to the “continued concern, immediately approved a formal investigations. It was Ms. Toll’s expectation that her subordinate staff, who are responsible for logging in the formal investigation, would timely act and perform the administrative task. That fact that the investigation was not logged until March 3, 2010, is not an indication that an investigation was not previously authorized or stated. The procedures that were in place within the Division allowed of ran investigation to occur without the officially logging of an investigation. Given this history it should be obvious that the events that occurred at the legislature on March 2, 2010 had no bearing on the decision to formally investigate. An investigation was called for and clearly was in the public interest. It has been Ms. Toll’s charge from the legislature to stop unfair or misleading practice by mortgage brokers and Ms. Toll has faithfully fulfilled her responsibilities in that regard.”

Harvey keeping mum on Toll’s investigation

Harvey, reached Monday evening, said he has not seen the release and he did not want to comment on it. However, he did say that he recalled an earlier correspondence from the real estate division that said American Home Funding needed to include some more routine information in its advertising to be compliant with rules. He said that correspondence made it clear that it was not an investigation, but a routine matter that could easily be remedied. “But I really don’t want to comment on this,” Harvey said. “There is an ongoing investigation and I should not get involved.”

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

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Erin Toll says a "hostile environment" has been created by her boss.

Erin Toll is caught in a “hostile environment” since she was stripped of her power and authority as the director of the Colorado Division of Real Estate on March 16, Toll argued in a court document filed today.

In the 12-page motion filed with the State Personnel Board, which seeks to strike a previous motion by the Colorado Attorney General’s office to dismiss Toll’s whistle-blower case, says that “Ms. Toll clearly perceives the environment as absolutely hostile to her.” On Tuesday, private attorney Cathy Greer was hired to replace the attorney general, following a claim by Toll’s lawyer that the AG’s attorney has a conflict of interest. Greer is being paid $200 per hour.

William Finger, Toll’s attorney in the matter, said that the attorney general cannot represent the Department of Regulatory Agencies and its executive director, Barbara Kelley, because it also has represented Toll on numerous matters. The real estate division falls under the umbrella of DORA.

Earlier, the attorney general had argued that Toll could not file a whistle-blower complaint because being placed on paid leave is not a disciplinary action. Kelley placed Toll on paid leave in the wake of publicity following the investigation of a mortgage company, although in the latest motion, Toll said she has never been told why she was put on leave. But among other things, the motion said that the “disclosure of information and testimony at the legislature and event connected to such, as well as providing information to the press, is at the heart of the actions taken against her.” That is an apparent allusion to her investigation of American Home Funding and one of its brokers, Sen. Ted Harvey, R-Highlands Ranch. DORA later said that Harvey was not part of the investigation for alleged deceptive advertising. Toll contended in her whistle-blower complaint that Kelley had killed the investigation of American Home Funding.

“Ms. Toll has also made an assertion that she has already suffered disciplinary action, including a claim of constructive discharge,” today’s motion says. “Constructive discharge occurs when an environment becomes so hostile that an employee can no longer continue to work.”

“Extreme mistrust”

The motion, which seeks that the state’s Administrative Law Judge and the Personnel Board strike the Motion to Dismiss (of the whistle-blower complaint and related filings) filed on behalf of DORA,  says that there is “an extreme degree of mistrust by and between Ms. Toll and the Executive Director that has severe implications”‘ Kelley is the executive director of DORA. Chris Lines, spokesman for DORA, did not immediately respond. Greer also could not be reached.

The motion says that the executive director, without naming Kelley, has released confidential communications of the attorney general “to Ms. Toll to a third party investigator without safeguards and without Ms. Tolls; authority.” It also said that the executive director is “banning her free speech rights, banning her right to provide information to the legislature, stripping her of all powers of all powers of her office.” It goes on to say that “threats of discipline create an environment that is so hostile that Ms. Toll cannot continue to carry on and effectively function as the Division Director and appropriately exercise powers of the position. Legislators are considering changing the division of real estate to what is known as a Type II Transfer, which would put the head of DORA in charge of most of its current duties, and make it less independent. Kelley has not allowed Toll to give her opinion on the matter to legislators, according to the motion.

It describes the forced leave as “an obvious and illegal attempt to strip Ms. Toll of her authority and powers as a division director. Toll has offered to meet with Kelley to attempt to resolve any differences,”but that offer has fallen on deaf ears, evidencing a clear intent by the Executive Director to remove Ms. Toll form her position and authority,” according to the motion.

No settlement talks

When asked by InsideRealEstateNews.com whether Toll had broached the subject of resignation in exchange for a monetary settlement, Finger said no such talks have occurred.

Kelley has until April 26 to respond to Toll’s grievances.

“The clock is ticking for them,” Finger said.

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

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Erin Toll contends the Colorado Attorney General has a conflict of interest by representing DORA, as it also has represented her in her capacity as the director of the Colorado Division of Real Estate.

Erin Toll is contending the the Colorado Attorney General can’t represent the Department of Regulatory Agencies in her legal dispute with DORA, because it also represents her, as the director of the Division of Real Estate.

Toll’s attorney, William S. Finger, said it is a conflict of interest for the attorney general’s office to represent both his client and DORA.

He made that argument last Thursday in a legal motion, when he received a one-week extension to respond to a motion to dismiss Toll’s whistle-blower complaint against her boss at DORA. DORA was placed on a paid leave of absence by the head of DORA, Barbara Kelley, last month, following a publicized dispute regarding an investigation Toll launched against American Home Funding and one of its mortgage brokers, Sen. Ted Harvey, R-Highlands Ranch. DORA later said Harvey was not part of the investigation, something Toll disputes. Toll said that Kelley later killed the investigation regarding alleged misleading advertising against American Home Funding. Toll filed a whistle-blower complaint against DORA and Kelley, alleging she should be returned to her job with all of its prior responsibilities and powers.

Conflict laid out

“Ms. Toll has been represented in litigation matters, including pending litigation matters by members of the Attorney Generals Office, some of whom work in the Division and Civil Litigation and Employment,” Finger said in the motion he filed with he State Personnel Board last week. “Ms. Toll has raised an objection to the appearance of any member of the Attorney Generals office, Division of Civil Litigation and Employment, as well as two other divisions from appearing as counsel.”

Fingers, last Friday evening, told InsideRealEstateNews, that “it is a conflict of interest for the attorney general’s office to represent DORA, because they have represented Erin Toll many times in the past.”

He said that the issue may be resolved before this Thursday, the deadline to answer a prior motion filed by Vincent Morscher, First Assistant Attorney General of the Civil Litigation & Employment Law Section, to have Toll’s whistle-blower complaint dismissed. “Disputes should be resolved at the lowest level and and as informally as possible,” according to Personnel Board rules, he argued in his motion to have the whistle-blower complaint dismissed. He also said that being placed on a paid leave is not a disciplinary action.

Outside Counsel Possible

Mike Saccone, spokesman for the Attorney General’s office, said he cannot comment, as they have not reached a decision on what to do yet.

He said they are exploring the possibility of using outside counsel, however. “We’re exploring the matter and I cannot comment  publicly on the matter at this time,” he said.

He said whenever there is a “‘high-ranking person in the state that has a lot of case traffic, we look at those issues, but we do not comment on them,” while the decision is still being considered.

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

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A judge rules against Erin Toll and the division of real estate regarding an open records request.

The Colorado Division of Real Estate and the Colorado Board of Real Estate Appraisers unlawfully withheld records and failed to respond to repeated, written requests for public records made by a group of Southeast Colorado property owners in August and September of 2009, a Denver District Court judge recently decided.

The landowners were seeking information concerning the basis of professional discipline administered against southern Colorado appraisers who had valued conservation easements for many of them.

“The ruling by Denver District Court is a significant step forward for our group,” said J.D. Wright, president of the owners group, Land Owners United Inc. “Some of us have been trying to get to the bottom of the charges against our appraisers for the last six years. The only answers we received have been that the appraisal value was too high. To the best of our knowledge, our appraisers tried in every instance to comply with the rules and regulations in effect at that time and in good conscience could not reduce valuation arbitrarily to satisfy the State and the tax credit brokers. Hopefully, as a result of yesterdays Court decision, the information made available will shed light on the reasons for the charges against our appraisers.”

Toll violated Open Records Act

Denver District Court Judge Sheila A. Rappaport entered her ruling on April 7  that Erin Toll, Director of the Colorado Division of Real Estate, and the Board of Appraisers, violated the Colorado Open Records Act by denying repeated requests from Land Owners United, LLC for records related to the investigation of appraisers who had provided appraisals to individual land owners in Southeast Colorado for the purpose of entering into conservation easements. Toll currently is on a paid leave of absence, following a highly publicized case unrelated to this court decision. So far, neither the division, not the Department of Regulatory Agencies, has responded to phone calls or e-mails from InsideRealEstateNews.com on Denver District Court decision.

In the Feb. 26, hearing that was the subject of the April 7 Order, the Division of Real Estate sought exemption under the Colorado Open Records Act based on the records being part of an “investigative file” and being part of “deliberative process.” The Court denied the Division of Real Estate the requested exemptions, stating that the State Defendants, “failed to ‘show cause’ why these public records should not be released to the Land Owners.”

Rappaport also  ruled that the Real Estate Division’s acts were “inconsistent with the Open Records Act requirement that written grounds for denial be promptly given . . . and inconsistent with the Board of Real Estate Appraisers’ own adopted policy stressing ‘prompt and accurate’ responses to Open Records requests.”

The court ordered that numerous documents be released in ”whole or with redactions” to the Land Owners.  Rappaport ruled that the the “investigative file” exemption not applicable as a matter of law or discretion because the Board of Real Estate Appraisers is not a criminal law enforcement agency. The judge also wrote that “all records are available to public inspection with limited exception when investigations occur, none of which are applicable here.” Rappaport also ruled that the “the benefits of additional public scrutiny and accountability of Board actions, where many Southern Colorado landowners have been seriously affected, outweigh the benefits of private internal agency discussion.”

Contact John Rebchook at JRCHOOK@gmail.com

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Erin Toll is the embattled director of the Colorado Division of Real Estate.

In the wake of the turmoil swirling around the Colorado Division of Real Estate – from director Erin Toll fighting to keep her job to legislation that would strip power from the director to discipline mortgage brokers – is the next step to eliminated the division all together?

While nothing appears to be in the works, rumors are swirling in some circles that some industry officials think that legislation to eliminate the division as a stand-alone entity may be on the table next year.

The idea would to take the areas that currently are under the purview of the real estate division – such as mortgage brokers, real estate brokers and appraisers – and have them regulated by other divisions under the  Department of Regulatory Agencies. The real estate division is part of the DORA, but is more autonomous than some other divisions.  DORA, for example, includes the Division of Financial Services, which some believe could ultimately be in charge of mortgage brokers.

DORA takeover not likely

“I don’t see that happening,” said Sen. Lois Tochtrop, D-Thornton, the Assistant Majority Leader and chair of the Business, Labor and Technology Committee. “I have not heard any discussion about that.” 

Chris Lines, spokesman for DORA, said nothing has been proposed to eliminate the real estate division.  And while he said he could not comment on anything unless he saw the wording of a specific bill, he pointed out that the entire purpose of DORA is to serve as an umbrella for a number of state divisions.

Mortgage broker board moving forward

Tochtrop is supporting an amendment to House Bill 1141 that would create an oversight board to discipline mortgage brokers. 

The executive director of DORA, Barbara J. Kelley, and not Toll, would serve on the board. In addition, the board would include three people from the mortgage industry and two consumer advocates. Critics of Toll have complained that her decision was final, and not always based on the facts of the case. Fighting Toll is very expensive and time consuming. Others say that is just sour grapes from those who don’t want to play by the rules.

Bill shifts power

“I discussed this with Barb Kelley, and she had no problem with it,” Tochtrop said, about her serving on the board and changing the status of the real estate division.  Kelley, and not Toll, would oversee the board because under the proposed legislation the real estate division would change from a Type I to a Type 2 division, in which the board is overseen by the DORA chief, Tochtrop said.

The difference between Type 1 and Type 2 divisions is immense.

“A Type 1 is independent and autonomous, and doesn’t report to anyone else,” even the governor, said DORA spokesman Chris Lines.  “In a Type 2, the role of the executive director of DORA is much more extensive. The DORA director is in charge of disciplinary boards and finances. In Type 2, the division director is still involved with the hiring, firing and administration, but the DORA director is in charge of finances and executive decisions.”

Toll’s woes not germane to mortgage board

Tochtrop, who is sponsoring the bill on the Senate side, said that she is not advocating it because of Toll’s highly publicized problems. Last month, Toll was placed on a paid leave of absence by Kelley, after she announced that she was investigating American Home Funding and one of its brokers, Sen. Ted Harvey, R-Highlands Ranch. Harvey last week abstained from voting on the the bill in committee. DORA later said that Harvey is not being investigated by the division. Soon after Toll was put on administrative leave and subsequently filed a whistle-blowing action against Kelley. Toll claimed in documents that DORA killed the investigation not only of Harvey, but of American Home Funding, which she had alleged was engaged in deceptive marketing. The Attorney General’s office, representing DORA, has requested that the whistle-blowing action be dismissed.

But all of that drama has nothing to do with the bill, Tochtrop said.

“Very honestly, it has nothing to do with any of that,” Tochtrop said. “When I found out that there was no board overseeing mortgage brokers – they had no board -  I found that very problematic. Having one person making the decisions – and I don’t care who it is – I find that very onerous. That is just too much power in one person’s hands.”

Tochtrop is a registered nurse, so she said she is aware of the value of having a board make disciplinary judgement decisions.

Cost of creating board nominal

Since HB 1141 was approved by the Senate committee last week, the next step will have it reviewed by appropriations, which she said should not be a problem, as it will be “cash-funded” by increased mortgage broker fees, and will not include any funding from the state.

The bill originally was going to create a seven-person board, and  it was going to increase fees to mortgage brokers by about $4.25 each year, but it should be slightly less with a five-person board, she said. The differences between the House and the Senate versions must be ironed out, before it is voted on by legislators.

She said the earliest it is likely to be sent to Gov. Bill Ritter for his signature, realistically, would be late summer or in the fall.

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

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