A quick update on the ongoing robo-signing/lost documentation foreclosure mess (which really needs some sort of snappy name a la “flash crash” that easily identifies which foreclosure mess we are referring to):
Missing summonses and false affidavits seem to plague the foreclosure process.
On Friday, Bank of America suspended foreclosures in 23 states to review its processes and fix affidavit-related issues. It joins JP Morgan Chase and GMAC/Ally in halting foreclosures in order to ensure the foreclosure process is carried out properly. The states where foreclosures are being suspended are: Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont, and Wisconsin.
There is a veritable procession of attorney generals calling for foreclosure moratoriums, including the AGs in California, Florida, Connecticut, Illinois, Ohio, and Colorado. New York Attorney General Andrew Cuomo is also investigating the issue.
Additionally, John Walsh, the Chairman of the Office of the Comptroller of the Currency called for JP Morgan Chase, Wells Fargo, Citibank, U.S. bank, HSBC, PNC Bank, and Bank of America to review their foreclosure processes. Walsh has previously stated to Congress that these processes “clearly had their deficiencies“ .
There is considerable uncertainty as to the outcome of this mess. Yves Smith from Nakedcapitalism has a great post that goes into specific detail about the extent of the problem that I highly recommend reading. Frankly the whole thing is pretty stunning and appalling, especially if you are a fan of due process of law, which I’m pretty sure is still guaranteed here and here.
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Jack Lewitz
October 5, 2010 @ 4:00 pm
It is not surprising that we find another controversy when it comes to home foreclosures. The number of people being faced with foreclosure is continues to be a problem and the banks do not have enough people to handle the problem.
If you have ever bought a home then you know the amount of paper work involved. I have been to many real estate closings and never once have I seen an attorney read all of the mortgage documents word for word to his clients.
We would have 8 hour closings if that were the case. Now we have an incident where GMAC was accused of not reading the documents and forging signatures. This is a problem and apparently GMAC is not the only bank doing this because Chase and BOA are also reviewing their procedures and putting a moratorium on foreclosures.
What will be the next?
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