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New law puts Colorado agents under regulators' thumbs

January 12, 2006

Thousands neglected to submit mandatory fingerprints

By Janis Mara
Inman News

In order to renew her real estate license last November, Nancy Brauer, a Colorado Realtor with 27 years' experience, had to pay $60 more than in past years and drive 45 minutes to be fingerprinted, thanks to a new state law.

Compared to some folks, Brauer was lucky. Thousands of Colorado real estate brokers missed the Dec. 31 deadline to comply with the new law mandating that brokers submit fingerprints and fees for background checks to state and federal law enforcement officials.

Technically, this means they can't do business at all – though an emergency measure enacted by the Colorado Real Estate Commission extended the processing deadline to Jan. 31, according to Commission Director Debbie Campagnola.

Though one-third of the state's approximately 46,000 agents were notified of the requirement, Campagnola said only about 8,000 submitted ink-rolled or digital fingerprints by deadline to the Colorado Bureau of Investigation, which does the checks and then forwards the information to the Commission.

"We are swamped," Campagnola said. "There are days I've been doing data entry. About 13,600 brokers have paid for renewal so far."

The Colorado Bureau of Investigation has processed about 12,000 fingerprints since July 2005 when the law went into effect, according to Karl Wilmes, the bureau's division director.

Depending on when their licenses expire, the remaining two-thirds of Colorado's active brokers must submit fingerprints and fees in 2006 or 2007, depending on when their licenses expire.

"(The fingerprinting) was a fairly large pain in the neck for a lot of our members," said Michael Labout, 2006 president of the Colorado Association of Realtors.

"Some of the places the Real Estate Commission said would do the fingerprinting didn't do it. The electronic prints are more accurate than the ink prints, but outlets providing electronic prints weren't as available, and were often out of the way," he said.

Many of his association's members felt they had been singled out and treated like criminals, Labout added.

While real estate agents in Colorado are licensed and now must provide fingerprints to the Colorado Bureau of Investigation under the new law, mortgage brokers are not licensed by the state and have no fingerprinting requirements.

"I think a lot of our members, a lot of licensees, felt like this law was enacted based on a couple of bad apples," said Labout. "The majority of Realtors are honest, ethical, law-abiding people doing a very important job and offering an important service."

The initial impetus for the law, according to Labout and Campagnola, was a television investigative report identifying some real estate licensees with active licenses who had been convicted of felonies.

"That was the reason they instituted the requirements for agents to get fingerprinting," Labout said. "It's a good idea, but the problem is (in) the mechanics." 

Other industry professionals agreed with his assessment, including Gerry Fitzpatrick, broker/owner of RE/MAX Southeast in Colorado.

"I think it's a good thing they are doing this to check renewals and weed out the undesirables. But this has created a big bottleneck," Fitzpatrick said.

Because officials are dealing with the renewal backlog, "some of the newer agents we have hired out of license school will have to wait six to eight weeks to get their licenses, the Commission told us," Fitzpatrick said. Campagnola's most up-to-date estimate was 12 weeks.

"A year ago, it only took 10 days," Fitzpatrick said.

New Colorado agents have had to supply fingerprints for decades. This law marks the first time renewing agents have had to do so, and is unique in the country as far as Campagnola knows.

The Commission tried to avoid the problem by notifying agents in advance via letters, and the Colorado Association of Realtors gave educational sessions.

"A lot of agents delayed and delayed," said Larry Duncan, an owner of Denver's RE/MAX 3000. "I have 60 agents, and I notified my agents. Our people are independent contractors; it's tough to supervise them, but we remind them they can't do business unless they're fingerprinted."

He characterized agents' initial reactions as, "'Jeez, it's more government in our lives,'" adding, "most of us understand the need for it (the law)."

Leif Riley

Leif Riley, a Realtor with RealEstateColorado.com, said, "I do think it's like we're being singled out. If we have to do it, (mortgage brokers) should too," referring to the fingerprinting.

Riley isn't alone in his belief that the mortgage industry could use some regulation. The Colorado Association of Mortgage Brokers has been lobbying for background checks and registration of the state's mortgage brokers for three years, said Bart Bartholomew, the association's past president.

Told that some real estate agents feel they have been singled out, Bartholomew said, "No argument from me. Colorado is one of the few states that has no type of regulation or registration on a state level for mortgage brokers." He is hopeful that the group's quest will be successful at the next legislative session.

Though the fingerprinting process has been a huge headache so far, Campagnola had some good news for the future.

"This law only exists for three years," she said. The law was instituted so the Commission could get existing agents' fingerprints into the database, and that goal will be accomplished by the end of 2007, she said.

Realtor Brauer, who had to drive for 45 minutes to get fingerprinted, said it was worth the time.

"Quite frankly, I think it's a good idea," Brauer said. "I've had a couple of instances in the last year where Realtors who were slightly suspicious have shown listings of mine. Nothing came of it, but it's just one of those things. There are certainly instances in business when it's prudent to check on people."

Copyright 2006 Innam News



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