Obama Official OKs Bank Foreclosure Resumption
Oct 20th 2010 6:13PM
Updated Oct 21st 2010 7:07AM
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.