|
More Foreclosures Suspended, Congress Requests Investigation Into Alleged Fraudulent Practices
Now Congress is getting in on the act. Last week Representatives Alan Grayson, Barney Frank, and Corrine Brown wrote a letter to Fannie Mae requesting that the mortgage giant review the firms it uses to process foreclosures, especially several of those that are currently under investigation in Florida for fraud. Yesterday Senator Al Franken requested Treasury Secretary Timothy Geithner, HUD Secretary Shaun Donovan, and U.S. Attorney General Eric Holder conduct an investigation into the “filing of false affidavits in foreclosure proceedings“.
More Foreclosures Suspended, Congress Requests Investigation Into Alleged Fraudulent Practices
|
Reports of the troubling practices of mortgage foreclosure servicers have received increased attention in the media over the last week or so. The story began with the news last week that Ally/GMAC suspended foreclosures in 23 states due to issues with foreclosure documentation. Yesterday we got the news that JP Morgan suspended up to 56,000 foreclosures.
There are allegations that in an effort to process foreclosures more quickly, fraudulent behavior occurred, including forging of documents and pushing foreclosures through the system without the proper reviews. These “foreclosure millsâ€, especially in Florida, are coming under scrutiny. For more background on the story, Yves Smith at nakedcapitalism.com has some excellent commentary here. This morning the New York Times published an article by David Streitfeld that goes into details about the situation. |
|
Now Congress is getting in on the act. Last week Representatives Alan Grayson, Barney Frank, and Corrine Brown wrote a letter to Fannie Mae requesting that the mortgage giant review the firms it uses to process foreclosures, especially several of those that are currently under investigation in Florida for fraud. Yesterday Senator Al Franken requested that Treasury Secretary Timothy Geithner, HUD Secretary Shaun Donovan, and U.S. Attorney General Eric Holder conduct an investigation into the “filing of false affidavits in foreclosure proceedings“. The letter continued:
“As part of this investigation, it is crucial that Ally and its employees are held fully accountable for any criminal misconduct. Additionally, all homeowners who may have experienced illegitimate foreclosure sales, those who have been forced to defend against illegitimate foreclosure actions, and those who have been harmed must be identified. these individuals must receive proper restitution and compensation, as provided for under the law.â€
Franken goes on to says he is concerned that “Ally’s practices are not an anomalyâ€. So what will come of all this? Nobody seems to know yet. There is speculation that this issue could force banks to the bargaining table and cause them to be more forthcoming with modifications and write-downs. Others are saying that this issue could essentially paralyze the foreclosure pipeline, tying up foreclosures in litigation. Rest assured that lenders and their lobbyists will fight tooth and nail to make these foreclosures stick. What will happen? Stay tuned…
http://www.bloomberg.com/news/2010-10-13/wall-street-plays-dr-jekyll-to-avoid-court-commentary-by-susan-antilla.html |
Home 
