Legal News

States aim to force changes in foreclosure process

By (Click The Law)

If the attorneys general of up to 40 states have their way, mortgage companies will have to revamp the way they handle foreclosures, pay penalties for violations and expand help to homeowners on the verge of foreclosure.

The top law enforcement officials of states around the country are launching a joint investigation into the problems with foreclosure documents that surfaced in recent weeks. They are already weighing the outlines of a potential settlement with the industry, said Iowa Attorney General Tom Miller, who will lead the investigation. The inquiry will be announced Wednesday morning.

Miller said one idea being discussed is to create an independent monitor to review whether banks have fixed their problems.

"We want the companies to put in a system such that this will not happen again," Miller said in an interview with The Associated Press. "We want to explore what other remedies might be available, in a way that makes homeowners and the general housing economy better off."

Some banks, such as Wells Fargo & Co. and Citigroup Inc., insist they did nothing wrong. But employees of Bank of America, Ally Financial's GMAC Mortgage unit and JPMorgan Chase have acknowledged in depositions that they signed thousands of foreclosure documents without reading them.

Full post as published by Click the Law on October 12, 2010 (boomark / email).