Saturday, October 2, 2010

2 Ohio officials join call to investigate JP Morgan Chase foreclosures

Two of Ohio’s top state officials Thursday waded into a rapidly growing number of examinations into possibly improper foreclosures affecting tens of thousands of homeowners around the country. Secretary of State Jennifer Brunner said she has asked federal prosecutors to investigate possible defects in legal papers supporting thousands of foreclosures in Ohio by JPMorgan Chase. A day after JPMorgan suspended some 56,000 foreclosures in 23 states because of possible legal flaws, Brunner said she had asked the U.S. attorney in Cleveland to investigate admissions by the lender’s employees in sworn depositions that documents were not properly notarized.

“For too long thousands of homes have been taken from consumers without proof that the foreclosing party actually has that right. … As the officer in Ohio who licenses notaries, I cannot stand idly by and watch financial institutions concoct a chain of title they never had by abusing the notary process,” Brunner said.
JPMorgan and the U.S. Justice Department declined to comment on Brunner’s action. HOUSING: Foreclosure sales pick up speed, drag down home prices PROBLEMS: Mistakes widespread on foreclosures, lawyers say Separately, Ohio Attorney General Richard Cordray said he has asked courts to examine foreclosures involving Ally Financial’s GMAC. Last week GMAC suspended evictions in 23 states while it reviews affidavits related to foreclosures that may have been signed and notarized improperly. JPMorgan cited similar reasons when it said it is reviewing supporting affidavits submitted to courts to repossess delinquent borrowers’ homes.

Attorneys general are launching inquiries into potentially flawed GMAC foreclosure documents in Connecticut, Texas, Iowa, North Carolina and Illinois. Freddie Mac and Fannie Mae have suspended foreclosures where GMAC was a servicer. Fannie Mae also said it is contacting servicers to ensure they’re accurately reviewing documents. John Walsh, chief of the Office of the Comptroller of the Currency, told a Senate hearing Thursday that his office has asked JPMorgan Chase and other large mortgage servicers to review their foreclosure processes. Greater scrutiny of foreclosures by courts and regulators could lead to further delays in a process that already grinds slowly. Economist Mark Zandi, with Moody’s Analytics, says the delays over flawed foreclosures could push resolution of the foreclosure crisis from seven years to 10. “The scale seems to be ballooning,” Zandi says.

By Stephanie Armour, USA TODAY

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