Bankruptcy

Foreclosure Investigation

By mcbride

The question is: is this good politics or good legal practice… or both I suppose.  “The attorneys general of all 50 U.S. states announced Wednesday that they are joining to probe mortgage loan servicers who are accused of submitting false affidavits, but they stopped short of calling for a national moratorium….Indiana Attorney General Greg Zoellersaid investigators initially will focus on whether industry employees - so-called ‘robo-signers’ - signed off on thousands of foreclosures every month without reviewing the files as legally required. Homeowner attorneys also allege that lenders forged signatures and improperly notarized documents. …

Ohio Attorney General Richard Cordray is taking a harder line. Last week, he became the first attorney general to sue a mortgage lender, in this case Ally, for improper foreclosures.

‘The most important thing that the lenders need to recognize is the seriousness of the situation. They can’t pretend this is a fourth-grade student not quite filling in the oval on a test. This is fraud,’ Cordray said in a phone interview. Ohio has asked the company to pay $25,000 per violation.”

Alabama alone was least interested in pursuing the mortgage companies which operate within its borders.  It’s attorney general made clear that there was serious disappointment with those companies which may have violated laws of other states! 

“The initial announcement by the attorneys general said 49 states had joined the probe; Alabama was the exception. After receiving media inquiries, Alabama said it, too, would join the investigation. ‘To be clear, no violations of Alabama law have been alleged at this time. That said, we are troubled to see that mortgage lenders around the country were violating the procedures of our sister states,’ the attorney general’s office said in a statement.”

Here is a link: http://www.washingtonpost.com/wp-dyn/content/article/2010/10/12/AR2010101205604.html?hpid=topnews

Michael

Full post as published by Texas Lawyer Blog on October 13, 2010 (boomark / email).