The nation’s largest mortgage loan companies are starting to delay foreclosures and determine whether or not they have rushed the foreclosure process for thousands of homeowners without following proper procedures. Employees of Bank of America, GMAC Mortgage and JPMorgan Chase have admitted to signing documents in a large number of foreclosure cases without verifying information contained in the documents.
In a document obtained by the Associated Press on Friday, Renee Hertzler of Bank of America said in a February deposition that she signed around 7,000 or 8,000 foreclosure documents a month, and said “I typically don’t read them because of the volume that we sign.”
Bank of America is delaying foreclosures in 23 states, as it attempts to resubmit corrected documents over the next several weeks; while Ally Financial Inc’s GMAC Mortgage and JPMorgan Chase have put a stop to tens of thousands of foreclosure cases as the public becomes more aware of the situation.
Many homeowners have contested their pending foreclosures due to improper documentation. If you are in the process of foreclosure, you shouldn’t get false hope from these delays in the processing, however. Analysts expect that most homeowners facing foreclosure will still end up losing their homes, even as state attorneys start putting pressure on the mortgage loan industry to become more diligent in their record keeping and paperwork processing:
- Florida Attorney General is investigating law firms who have ties with GMAC for possible fraud involving documents in foreclosure cases, while the Ohio Attorney General requested that judges review foreclosure cases of GMAC mortgage loans.
- The state Attorney General of New York has been in contact with several mortgage lenders and is reviewing the situation to prevent improper removal of homeowners due to foreclosure mistakes.
- An attorney in Connecticut asked the state to freeze home foreclosures for 60 days, to allow time for the industry to find and correct defective foreclosure documentation.
- California Attorney General required JPMorgan to suspend foreclosures unless they were able to show how they complied with the state’s consumer protection laws which requires the mortgage lenders to contact borrowers who are at risk of losing their homes first – to determine if they might qualify for various mortgage assistance programs. JPMorgan has temporarily stopped the foreclosure process on more than 50,000 homes.
- A Massachusetts lawyer, James O’Connor, said: “We have had thousands, maybe hundreds of thousands of foreclosures around the country by entities that did not have the right to foreclose.”
In about half of the states, mortgage loan lenders can foreclose without a lengthy court process when homeowners become delinquent on their mortgages. But, in 23 states, including those that Bank of America is delaying the foreclosure process in while reviewing documents for errors, there is a set court process before a home can be foreclosed on. The states that require court proceedings to foreclose include: 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.
