Linda Martin, who bought rental properties to build a retirement nest egg, considers herself a smart person.

But the Lakewood resident choked back tears Monday as she told a Senate committee that she's on the verge of losing all three of her rental homes after becoming a victim of mortgage fraud.

Martin said "a fly-by-night mortgage broker" persuaded her to refinance her property with so-called low-interest loans that in reality doubled her mortgage payments to $2,600 a month on each home.

"I felt like I had a reasonable amount of education," Martin said. "There is no way in God's heaven I would have signed notes if I had known they doubled my payments.

"I'm (here) today because something needs to be done. Most of us in my situation are professionals. We have been duped and tricked."

Nearly a dozen witnesses testified on behalf of a measure meant to target "predatory lending practices," reduce a record number of foreclosures in Colorado and crack down on those who prey on homeowners who can barely afford their payments.

The Senate State, Veterans and Military Affairs Committee on Monday voted 3-2 to advance Senate Bill 203, which would require mortgage brokers to get a license before they could do business in Colorado.

The measure, by Sen. Peter Groff, D-Denver, would also require new disclosure rules for commercial lenders and Realtors and other mandates.

Groff cited troubling foreclosure statistics as he called for a crackdown on mortgage brokers who he says have run amok in Colorado because of the state's lax regulations.

Last November, the state reported 5,031 foreclosures, one for every 362 households. That's up 88 percent from November 2005.

"We're trying to catch the bad actors," Groff said. "We're trying to figure out a way to corral the growing foreclosures swamping the state."

Some mortgage lenders argue that some of the provisions in SB 203 and a companion measure, House Bill 1322, would make lenders wary of considering homebuyers who cannot make large down payments or who lack extensive credit histories.

In other action, a Senate committee took steps to clear a roadblock to RTD's FasTracks expansion of light rail and commuter rail.

The Senate Judiciary Committee unanimously passed SB 219, which would limit Burlington Northern-Santa Fe railroad's liability from accident-related lawsuits, even if the railroad itself might be at fault.

The Regional Transportation District wants to build light rail and commuter rail along existing railroad corridors.

In talks with RTD, BNSF has said the railroad must be immune from liability, arguing that running transit on freight lines raises the risk of accidents and, therefore, RTD should assume most of the financial risk.

Federal law limits railroad liability to $200 million per accident for all claims in case of private passenger accidents on private rail lines. RTD estimates that a $200 million policy will cost $2 million a year.

washingtonam@RockyMountainNews.com or 303-954-5086