By: Carrie Bay
The highest counsels from all 50 states have teamed up to launch a coordinated investigation of the mortgage servicing industry.
Attorneys general from every state, as well as banking and mortgage regulators in more than three dozen states, have formed what they’re calling the Mortgage Foreclosure Multistate Group.
Led by Iowa Attorney General Tom Miller, the group says it plans to examine the practice of so-called “robo-signing” among mortgage servicers and will explore whether individual companies have improperly submitted documents in support of foreclosures.
According to a statement from the multistate group, they have already begun reviewing affidavits from certain servicers, and the facts uncovered from these reviews will dictate the scope of the coalition’s inquiry.
Specifically, the group will investigate whether companies falsely asserted to reviewing and verifying supporting
foreclosure documentation, and whether companies’ employees signed affidavits outside the presence of a notary public.
The probe was prompted by the recent foreclosure suspensions from four lenders and one subprime servicer, as well as court-documented evidence that internal servicing staff at these firms were cutting corners and not following procedure in processing foreclosure paperwork.
According to Miller, the initial objectives of the coordinated effort include: putting an immediate stop to improper mortgage foreclosure practices; reviewing past and present practices by mortgage servicers subject to the inquiry; evaluating potential remedies for past practices and to deter future improper practices; and well as establishing a mechanism for more effective independent monitoring of future mortgage foreclosure practices.
“These are starting points, and it’s possible this group may limit, expand or change its objectives,” Miller said. “What’s important here is this is a cooperative and coordinated effort by states to address a serious problem. This is not simply about a glitch in paperwork. It’s also about some companies violating the law and many people losing their homes.”
GMAC Mortgage, JPMorgan Chase, Bank of America, PNC Financial, and Litton Loan Servicing have all suspended foreclosures and REO sales in certain states to conduct their own reviews of foreclosure case paperwork and procedures.
GMAC said in an announcement Tuesday that while its reviews are ongoing, so far, the company “has found no evidence” of improper or unlawful foreclosures.
Thu, Oct 14, 2010
Residential