4nik8
10-13-2010, 01:15 PM
The move comes amid recent allegations that mortgage-servicers, which include units of major banks such as Bank of America Corp., submitted fraudulent documents in thousands of foreclosure proceedings nationwide.
Per a >>Wall Street Journal article by Robbie Whelan and Ruth Simon<< (http://online.wsj.com/article/SB10001424052748704518104575546512922974100.html?m od=WSJ_RealEstate_LeftTopNews), a group of 40 state attorneys general is going to announce a joint investigation into mortgage servicers and their foreclosure processes to try and get to the bottom of the foreclosure fiasco. In the event you are somehow unaware, there are allegations that there are widespread and systemic defects in foreclosure and securitization processes across the nation including fraud and possible forgery of documentation necessary for foreclosure. A fairly straightforward explanation of this very complicated issue can be found here.
As a result of these issues, GMAC/Ally and JP Morgan Chase suspended foreclosures in 23 states. Bank of America went one step further and suspended foreclosures nationwide.
Ohio Attorney General Richard Cordray* was quoted as saying:
“I think the mortgage-servicing firms need to understand that they face real exposure now, and they would be well advised to take this very seriously, to clean this up by doing loan workouts to keep people in their homes, which up till now they’ve just paid lip-service to”.
*This morning’s New York Times has a pretty good profile of Cordray, who has a track record of successful prosecution in similar cases.
The ramifications of these investigations remains unclear. The Obama Administration has come out against blanket foreclosures, claiming that it would hurt the economy and the housing market. Many lawmakers, including those within Obama’s own party, such as Senate Majority Leader Harry Reid, have called for a foreclosure suspension until the issue is sorted out. As with all matters, this one is as much political as legal heading into the November elections. Some speculate that an investigation into foreclosure practices could force many lenders to the bargaining table, prompting large scale mortgage modifications or principal forgiveness. We shall see, stay tuned…
Per a >>Wall Street Journal article by Robbie Whelan and Ruth Simon<< (http://online.wsj.com/article/SB10001424052748704518104575546512922974100.html?m od=WSJ_RealEstate_LeftTopNews), a group of 40 state attorneys general is going to announce a joint investigation into mortgage servicers and their foreclosure processes to try and get to the bottom of the foreclosure fiasco. In the event you are somehow unaware, there are allegations that there are widespread and systemic defects in foreclosure and securitization processes across the nation including fraud and possible forgery of documentation necessary for foreclosure. A fairly straightforward explanation of this very complicated issue can be found here.
As a result of these issues, GMAC/Ally and JP Morgan Chase suspended foreclosures in 23 states. Bank of America went one step further and suspended foreclosures nationwide.
Ohio Attorney General Richard Cordray* was quoted as saying:
“I think the mortgage-servicing firms need to understand that they face real exposure now, and they would be well advised to take this very seriously, to clean this up by doing loan workouts to keep people in their homes, which up till now they’ve just paid lip-service to”.
*This morning’s New York Times has a pretty good profile of Cordray, who has a track record of successful prosecution in similar cases.
The ramifications of these investigations remains unclear. The Obama Administration has come out against blanket foreclosures, claiming that it would hurt the economy and the housing market. Many lawmakers, including those within Obama’s own party, such as Senate Majority Leader Harry Reid, have called for a foreclosure suspension until the issue is sorted out. As with all matters, this one is as much political as legal heading into the November elections. Some speculate that an investigation into foreclosure practices could force many lenders to the bargaining table, prompting large scale mortgage modifications or principal forgiveness. We shall see, stay tuned…