Employees inadequately reviewed foreclosure files
In the most sweeping action undertaken by a state regarding dilemma associated with document irregularities, Connecticut Attorney General Richard Blumenthal has initiated a moratorium on every foreclosure by every bank for the next 60 days on Friday.
Additionally, California broadened its moratorium on foreclosures that it declared last week for Ally Financial foreclosures to incorporate foreclosures by J.P. Morgan Chase as well.
Referring to the organizations’ reviews of crucial foreclosure documents as “a ruse,” California Attorney General Jerry Brown (D) directed J.P. Morgan to demonstrate it is complying with the law before it proceeds with foreclosures in that state.
Both J.P. Morgan Chase and Ally now have suspended foreclosure proceedings in 23 states due to the fact that certain employees admitted to signing off on foreclosure paperwork not having adequately reviewed the files.
Illinois and Colorado have also frozen foreclosures by Ally along with no less than seven additional states having launched investigations into the issue. However Connecticut is the very first to actually initiate an industry-wide ban.
Meanwhile back in Connecticut, Blumenthal has stated that he is examining J.P. Morgan Chase and Ally, previously GMAC, which has received $17 billion in federal bailout funding and is also majority-owned by the U.S. Treasury, in addition to other lenders.
Blumenthal stated that the activities of J.P. Morgan and Ally are a “possible fraud on the court undermining the integrity of the legal process and consumers’ ability to fight foreclosures.”
“This freeze should stop a foreclosure steamroller based on defective documents and enable effective remedies,” he said.
