Illinois is one of a reported 23 states where some banks/servicers have suspended foreclosure activities in the wake of concerns raised regarding accuracy of documents filed in foreclosure lawsuits. The Illinois Attorney General’s Office has issued letters to JP Morgan Chase and Ally (formerly GMAC) asking for meetings to address concerns that the companies have violated the state’s Consumer Fraud Act and reports about the accuracy of documents filed in foreclosure lawsuits. The Illinois Department of Financial and Professional Regulation also issued a statement. In a statement, IAR Chief Legal Counsel Steve Bochenek, says the moratorium will impact clients in different ways. The key, Bochenek says, is that if any client of a brokerage company has a question as to how this suspension impacts them they need to talk to an attorney or call the Illinois Attorney General’s Homeowners’ Referral Helpline at 1-866-544-7151
Madigan urged homeowners to visit her Web site, www.IllinoisAttorneyGeneral.gov, for resources available to assist homeowners in crisis. Included on the site is her Illinois Mortgage Lending Guide, a resource manual containing step-by-step instructions for those struggling to make their loan payments and a list of HUD-certified counseling agencies that offer default counseling services.
GMAC Finds „No Evidence“ of Improper Foreclosures, Expands Reviews
10.12.2010
GMAC Mortgage says although reviews of foreclosure affidavits involving homes in 23 judicial states are ongoing, the company “has found no evidence to date of any inappropriate foreclosures.”
GMAC suspended foreclosure actions and REO sales in states where courts oversee homeowner evictions and property repossessions on September 20th, after evidence surfaced that members of the company’s servicing staff were signing off on thousands of foreclosures a month without checking the paperwork for accuracy or following proper procedures as mandated by state laws.
The company froze all foreclosure activities in order to review case files from those states. GMAC said at that time it expected any foreclosure delays resulting from the temporary suspension “to be resolved within the next few weeks and certainly before year end, without serious consequence.”
In a statement issued Tuesday, GMAC said the review and remediation efforts related to cases in the 23 judicial state has been underway for approximately two months and will continue.
GMAC’s announcement comes one day before a coalition of state attorneys general from as many as 40 states are expected to launch a joint investigation into the company’s foreclosure processes.
Other firms that have announced voluntary foreclosure suspensions – including JPMorgan Chase, Bank of America, PNC Financial, and Litton Loan Servicing – are also expected to be targeted by the states’ coordinated investigation.
dsnews.com
The Ones Moving On
In a welcome gesture of commitment, Wells Fargo & Co. has expressed confidence in its foreclosure documentation, based on the affidavit procedures and the auditing of its process that it conducts on a daily basis. As a result, the company will not stop its foreclosure process.
The other institution who is confident of its foreclosures is Citigroup Inc. Citi has affirmed that it continuously reviews its document verification processes and provides proper training to its staff, so it has a low exposure to such risks of having to freeze its foreclosure process
What Went Wrong?
The wide-ranging problems are rising in courts across the nation. The problem intensified because of the negligence of homeowners and lawyers despite their awareness.
The documents have been signed by employees, in some cases without verifying decisive information like previously outstanding amounts of the borrowers. Also, signatures were not reviewed by a notary in many cases. Even when the notarizations took place, it is unlikely that the officials witnessed the signings as per the legal requirement.
Another major problem surfaced when multiple banks claimed that they have the right to foreclose on the same property.
Flawed paperwork also raised questions about the validity of the ownership documents. In many cases, an individual who moved into a house after a payment may not be the legal owner. As a result, mortgage lenders improperly expelled original homeowners from their homes as part of their foreclosure process.
dailymarkets.com
Bank of America had originally suspended foreclosure activity in states where foreclosures had to be approved by the courts, but the freeze was then extended to all 50 states.
There is no timetable for how long the moratorium will last or how long it will take banks to review their records. But the chief executive officer of Bank of America said Friday the freeze will likely last at least a few weeks.