Massive Halt n Foreclosures due to Fraud Allegations

On Sept. 17, GMAC Mortgage temporarily halted foreclosure proceedings on homeowners in 23 states including Florida, New York, Illinois and Ohio. The company has said employees preparing foreclosure filings submitted signed court affidavits that contained information they had not personally verified.

GMAC Mortgage has withdrawn some of the affidavits, and the Treasury Department, which owns a majority of parent company Ally Financial Inc. thanks to a $17 billion bailout, has ordered the company to correct its procedures, the New York Times reported.

Now, JP Morgan Chase has put the brakes on 56,000 foreclosure proceedings, following similar allegations against a team of Chase workers in Ohio that was allegedly signing off on 18,000 documents a month.

In what’s been dubbed the “robo-signing” scandal, JP Morgan Chase and Co. has joined GMAC Mortgage in temporarily halting foreclosure proceedings in judicial foreclosure states, following allegations that workers the companies employed failed to follow the proper legal procedures in filing paperwork demonstrating that the lenders had the right to foreclose.

In the past, such allegations — often brought by attorneys representing homeowners in disputed foreclosure proceedings — have mostly delayed, not stopped foreclosure proceedings.

But the robo-signing allegations could affect other lenders who rely on a paperless loan registration system developed for the industry by Mortgage Electronic Registration Systems Inc. (MERS), slowing foreclosure proceedings in courts nationwide.

Deborah Bremner
The Bremner Group at Coldwell Banker
REALTOR, 00588885,
(O) 310-571-1364 DIRECT
(D) (310) 800-2954

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