On 09/29/2010, J P Morgan Chase announced it was suspending foreclosures because some of its employees might have “improperly” prepared the foreclosure documents.
J P Morgan Chase has operations in 60 countries, is a major provider of financial services with assets of $2 trillion and is one of the big four banks of the United States with Bank of America, Citi Group and Wells Fargo.
During the time these foreclosures are halted, J P Morgan Chase is going to review its legal procedures, to “systematically re-examine” its foreclosure filings. The spokesman for J P Morgan Chase, Tom Kelly said this was to verify that the procedures meet legal standards and also said the lapses were technical.
Defense lawyers are eager to review these findings and are saying they will now work to have their clients’ foreclosure cases thrown out of court. There are 23 states in America where foreclosures must be approved by a court of law and North Carolina is one of them.
This is the second announcement in a week that foreclosures will be suspended by a major mortgage company. Last week, GMAC Mortgage suspended an undisclosed number of foreclosures to give it time to take a closer look at its own procedures.
During the week of 09/27/2010, the N.C. Attorney General said it was looking at GMAC Mortgage for what it calls "questionable tactics" that may have resulted in “undeserved foreclosures” on some North Carolina homeowners.
GMAC Mortgage said it was a “procedural error”.
Why did this happen? How could this happen?
It appears that J P Morgan Chase and GMAC Mortgage processed hundreds of thousands of foreclosures very quickly and to get these properties back on the market, they hired people that have been coined “robo-signers”.
It has been learned through affidavits that these “robo-signers” may have signed 10,000 or more foreclosure affidavits a month. The eagerness to go after these property owners has now come back to have a harmful effect on these two companies.
In an affidavit for a foreclosure, the preparer must personally attest that they reviewed the files. These “robo-signers” acknowledge they had no time review the foreclosure file. There is a possibility that hundreds of thousands of foreclosure cases could be in doubt. Many homeowners do not have legal counsel when they go through the foreclosure process. These home owners cannot afford their mortgage payment, much less legal counsel.
This may just be the start of a wide spread system problem with these mortgage lenders. Judge J. Thomas McGrady, from Florida, said after the GMAC announcement: “I don’t want to say that every one of these cases is wrong and a fraud on the court, but it is a big concern for us.” The foreclosure process in many states is lethargic, which benefits delinquent homeowners. Some home owners are living in foreclosed properties years after being notified of the foreclosure and are living “rent free” for years. Other home owners that have foreclosed homes are collecting monthly rent from their tenants and keeping it for personal use.
This announcement from GMAC and J P Morgan Chase brings many uncertainties. As an example, can a completed foreclosure be vulnerable to what GMAC is calling “corrective action” ? If the completed foreclosures are vulnerable, then former homeowners could press their claims and could conceivably dislodge the new buyers from the home. This may threaten to prolong the housing crisis for many years to come here in North Carolina.
Many North Carolina homeowners are struggling to hold on to their homes. North Caroline Attorney General Roy Cooper said in a statement. "I want to make sure that foreclosure actions by mortgage companies follow the law and give homeowners a fair chance to keep their homes”.
Courtesy Jayne Anderson, Associate Broker, BrunswickFineHomes.com, 800-450-3684