Just when it looked like the Ally Financial/GMAC Mortgage robo-signing drama couldn't get any more, well, dramatic -- it did. Last week, the fourth-largest mortgage lender in America revealed that the foreclosure documents for potentially all its foreclosures over the last five years had simply not been read, because the staffer tasked with signing them had been assigned the inhuman job of "reading" and signing over 10,000 documents per month.
More than 50,000 foreclosures, evictions and resales of foreclosed homes on home loans held or serviced by GMAC Mortgage were frozen across 23 states; within the week, the California attorney general had asked GMAC to stop foreclosures in the nation's largest state until the company could prove it was complying with state foreclosure laws, Connecticut's attorney general had requested a court order halting all banks from foreclosing on homes there for 60 days and the attorneys general of Ohio and Florida had initiated investigations into GMAC foreclosures.
This week, though, the debacle flew straight up the food chain of the mortgage lending industry. Executives at JP Morgan Chase and the country's largest mortgage lender, Bank of America, have also confessed to signing tens of thousands of foreclosure documents without reading them, causing these banks to also halt foreclosures in the 23 states that require judicial involvement to consummate a foreclosure and evict the former homeowner.
The latest? Yesterday, the federal Office of the Comptroller of the Currency ordered the seven largest mortgage lenders in the country to review their foreclosure processes for flaws in their document management systems.
For tips on what this means to those who are facing or have already experienced foreclosure, and think their documents might have been "robo-signed," check out this report we filed when the Ally Financial/GMAC Mortgage foreclosure mill story first broke.
Small Cap Investing
Learn now to invest in small companies the right way.View Course »