Bank of America (BAC) is preparing to resume foreclosures in 23 states, just 10 days after halting the foreclosure process on properties in all 50 states. The foreclosure halt came amid concerns that company executives may have signed documents without properly verifying them.
GMAC, which is a unit of Ally Bank, has hired a number of accounting and legal firms to go over its foreclosure procedures.
The government is looking into allegations that mortgage lenders in the foreclosure crisis have been evicting homeowners using flawed court papers, Attorney General Eric Holder said Wednesday.
Wells Fargo still won't admit it, but its employees' testimony makes it clear that, like GMAC, JPMorgan Chase, Bank of America and OneWest Bank, they have a problem with their foreclosure documents. But the solution isn't just a better documentation process: It's time to bring back cram downs.
Several big banks have admitted that their employees routinely sign scads of foreclosure documents without verifying their information. Wells Fargo and CitiMortgage have denied engaging in similar practices. Yet new evidence shows they do.
JPMorgan Chase & Co. will delay foreclosing on some properties in order to review affidavits that were signed by employees who didn't verify related files, making the company at least the second bank in recent weeks to suspend the foreclosure process on properties in order to better examine documents.
The problem of faulty foreclosure documents isn't limited to GMAC: A JPMorgan Chase employee has testified that she was one of eight managers who combined to sign some 18,000 documents a month without the personal knowledge of the facts that the documents claimed they had.
Court affidavits by Ally Bank subsidiary GMAC Mortgage were signed by people who didn't personally know if the information in the affidavits were true, and at times, didn't get the affidavits notarized.
GMAC Mortgage told its agents and brokers to stop foreclosures on homes in 23 states, including Florida, Illinois, Indiana and Ohio.