Foreclosures Screach to a Halt

It's like watching a big, bad old-fashioned train wreck. If you haven't already heard, several big banks across the US have suspended all foreclosures in 23 states due to inpropper procedures. The contorversy is over "robo-signing", where employees did not follow required legal procedures to read and verify all documentation relating to each foreclosure case.

One Bank of Amercia employee acknowledged in a legal deposition that she had signed 7,000 - 8,000 documents relating to foreclosures every month without reviewing the documents. A GMAC employee admitted in depositions that he authorized up to 10,000 foreclosures a month without seeing the files associated with them. At Chase, a "robo-signer" in Ohio, stated that she signed off on about 18,000 foreclosure affidavits and other documents a month without reviewing all the files.

The 23 states 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.

The Office of Comptroller of the Currency last week ordered the nation's largest loan servicers to review their foreclosure processes. They directed Bank of America, J.P. Morgan Chase, Citibank, HSBC, PNC Bank, U.S. Bank, Wells Fargo and GMAC Mortgage to verify that they are following proper procedures, and that their practices haven't harmed borrowers in the past.

To add to the dilema, all major Title Insurer's such as Old Republic, First American, and Stewart Title have all indicated they will no longer write policies for the banks involved until the issue has been resolved. This could bring Real Estate sales themselves to an even louder screaching halt.

Like this article?

Natalie Flaming
Realtor - Broker Associate
The VIP Team
Metro First Realty
Direct: 405.412.5452
www.TheVIPofOKC.com