Foreclosures
Of course, it would be too optimistic to think that there would be a permanent freeze on foreclosures for families that want to save their homes. No, this is not the case. In recent weeks, large banks such as Bank of America, Ally, Chase and others were made aware that systemic faulty foreclosures may have occurred in the processing of their foreclosures on home mortgages. As a result, foreclosures were halted in up to 50 states while the banks re-examined their foreclosure processes and documents.
Let’s take a look at how we got to this point where some of the largest banks in the U.S. put a stop to their own foreclosure processes.
Starting back in September, there were reports that Ally Financial, formerly GMAC Mortgage, sent a memo to it’s employees to halt evictions temporarily on homes that they foreclosed on in 23 states across America. Initially, there were denials that a freeze in foreclosures and evictions was taking place, but later employees of GMAC Mortgage acknowledged receiving an urgent memo ordering them to stop evictions and lock outs due to foreclosures on properties of homeowners with delinquent loans.
According to Bloomberg, an Ally spokesperson, James Olecki, they may “need to take corrective action in connection with some foreclosures” in the affected states, according to a two-page memo dated Sept. 17 and obtained by Bloomberg News. Not only did Ally halt evictions and foreclosure proceedings on delinquent mortgage loans, but also they stopped cash-for-keys as well as suspended sales of repossessed foreclosed properties.
About a week later, around September 30, 2010, Chase announces that it also is stopping foreclosures in the same 23 states for similar reasons; illegal foreclosure proceedings! Now most of the states where the foreclosures were halted are in states where foreclosure proceedings must go through and approved by the courts. Chase states that most of their mistakes were caused by “clerical errors” by employing the process of “robo-signing” of documents instead of legally and manually reviewing the documents in the foreclosure process. In order to expedite foreclosures, JP Morgan Chase like other large institutions of holders of delinquent home mortgages enlisted the services of “robo-signers”. Robo-signers were individuals who quickly signed documents to speed up the foreclosure process.
In addition to states Attorney’s Generals and other foreclosure fraud litigation, many cases could be challenged and even thrown out due to these so-called “illegal” foreclosure processes as stated in the New York Times.
The 23 states affected are as follows;
- Connecticut
- Florida
- Hawaii
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Nebraska
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Pennsylvania
- South Carolina
- South Dakota
- Vermont
- Wisconsin
Now Bank of America first stopped foreclosure proceedings and sales in 50 states, but are on the verge of lifting it’s stay on foreclosures. More on Bank of America coming up, so check back shortly!
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