An Obama Administration housing official said mortgage lenders such as Bank of America Corp. (BAC) and JPMorgan Chase & Co. (JPM) could legally resume foreclosures on homes, though they may be fined if it's discovered that they acted against the law. Meanwhile a New York judge is forcing lawyers handling foreclosures to verify paperwork accuracy, the Associated Press reported.

Housing and Urban Development Secretary Shaun Donovan said Wednesday that there's been no evidence that the foreclosure system used by banks is flawed, though he added that the Federal Trade Commission and bank regulators could fine mortgage companies that have been found to have broken the law, the wire service said. Federal agencies have been probing banks' foreclosure-documentation process after at least three financial institutions in recent weeks said they would either review or suspend foreclosures because of possible errors. Federal regulators also have said they'd support individual states' efforts to make similar probes.

Donavan made the statement two days after Bank of America said it would begin preparing documentation for the resumption of foreclosures in 23 states and less than two weeks after it halted the foreclosure process on properties in all 50 states. JPMorgan Chase & Co. said Oct. 13 that it was broadening its review of its foreclosure process to about 115,000 cases in 41 states, while Ally Bank unit GMAC Mortgage also said last week that it would review its foreclosure procedures in all 50 states.

Still, as some banks restart the foreclosure process across the U.S., New York Chief Judge Jonathan Lippman enacted a rule requiring attorneys to verify documentation accuracy through signed affirmations before proceeding with the foreclosure process, according to the AP. The new rule applies to the 78,000 foreclosure cases already in process in New York courts as well as new cases, the AP said.


Increase your money and finance knowledge from home

Intro to different retirement accounts

What does it mean to have a 401(k)? IRA?

View Course »

Advice for Recent College Grads

Prepare yourself for the "real world".

View Course »

Add a Comment

*0 / 3000 Character Maximum

5 Comments

Filter by:
Sandy

bankers need to go to jail they need to be arrested. whom ever is in charge needs to go to jail

October 25 2010 at 5:56 PM Report abuse rate up rate down Reply
Greg and Mel

Why are the banks investigating themselves? They know exactly what they have been doing the last 3-5 years. Enjoying the money the Americans citizens gave them, while they still lie, cheat, and steal our homes, pocket mortgage payments home owners make because they believe they will NEVER be held accountable, nor have to give the homes back. They will of course never get sued by everyone they screwed, and will only be regarded as "genius' and not their rightful now etched in history tile of "failed losers". If the banks would have just done their job and tried to modify, or refinance even a few these loans with the money we gave them and then make their decision if it is sustainable or not, this would not be happening! No one can figure out why they seem to try to out-do the other service-rs with outrages bull stories to homeowners for so long, thinking they will financially gain our hard earned investments, when they are just bankrupting the banks they "work" for. America's government better stop ignoring this criminal act and do something about it because they are the regulators of the financial circus running this country into the ground, and they are not immune to being held respnsible as well for non performance of the jobs we voted and hired them to do. Fraudulently kicking people out of their homes for being the responsible parties, and working to save their home/investment, is only makes the banks humiliation that much worse. These bankers and courts could not possibly posses any degree stating they went to the University of "Sabotage Thyself, and my fellow Citizens..while never getting caught"....Do they? The game still is not working. Let the American citizens know when this embarrassment is over. The sooner the easier the clean up will be, and we can move on with civil life like we somewhat knew before this disaster! Its getting old.

October 21 2010 at 4:20 AM Report abuse +2 rate up rate down Reply
ultraz2

BANK FORCLOSURES does this mean that the tax payers can finally start forclosing on the TARP BANKS???????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????

October 20 2010 at 11:57 PM Report abuse +1 rate up rate down Reply
Sheldon

Why is it if i commit fraud i go away to prison. But all these lawyers get a slap on the wrist and are allowed an excuse like OOPS. Wait I forgot there are 2 sets of laws, one for the commoners(us folks) and one for the "To Big To Fail Banks". I guess the Judges like to be made fools of. If I was a judge I'd be putting people in prison.

October 20 2010 at 11:00 PM Report abuse +3 rate up rate down Reply
1 reply to Sheldon's comment
shm3418

because you and I are mainstreet and the lawyers represent wallstreet! Remember in Nov.!

October 20 2010 at 11:04 PM Report abuse +4 rate up rate down Reply