WASHINGTON (CBS/AP) — California Attorney General Jerry Brown has agreed to team up with officials across the 49 other states and the District of Columbia in a joint investigation into allegations that mortgage companies may have improperly or illegally foreclosed on hundreds of thousands of homeowners.

The states’ attorneys general and bank regulators will examine whether mortgage company employees made false statements or prepared documents improperly.

Election Looms Over Brown Decision: Lori Gay, president & CEO of Los Angeles Neighborhood Housing Services talks with KNX 1070’s Dick Helton, Vicky Moore, and Jack Popejoy

Alabama initially did not sign on to the investigation. It reversed course after the joint statement was released.

Attorneys general have taken the lead in responding to a nationwide scandal that’s called into question the accuracy and legitimacy of documents that lenders relied on to evict people from
the homes. Employees of four large lenders have acknowledged in depositions that they signed off on foreclosure documents without reading them.

The allegations raise the possibility that foreclosure proceedings nationwide could be subject to legal challenge. Some foreclosures could be overturned. More than 2.5 million homes have
been lost to foreclosure since the recession started in December 2007, according to RealtyTrac Inc.

The state officials said they intend to use their investigation to fix the problems that surfaced in the mortgage industry.

“This is not simply about a glitch in paperwork,” said Iowa Attorney General Tom Miller, who is leading the probe. “It’s also about some companies violating the law and many people losing their homes.”

Ally Financial Inc.’s GMAC Mortgage Unit, Bank of America and JPMorgan Chase & Co. already have halted some questionable foreclosures. Other banks, including Citigroup Inc. and Wells Fargo & Co. have not stopped processing foreclosures, saying they did nothing wrong.

In a joint statement, the officials said they would review evidence that legal documents were signed by mortgage company employees who “did not have personal knowledge of the facts
asserted in the documents. They also said that many of those documents appear to have been signed without a notary public witnessing that signature — a violation of most state laws.
“What we have seen are not mere technicalities,” said Ohio Attorney General Richard Cordray. “This is about the private property rights of homeowners facing foreclosure and the integrity
of our court system, which cannot enter judgments based on fraudulent evidence.”

(Copyright 2010 by The Associated Press. All Rights Reserved.)
APTV-10-13-10 0933PDT

Comments (2)
  1. Wally Courtney says:

    The banks may not have “dotted the i’s and crossed the t’s”, but what does a borrower think will happen when they do not make their mortgage payment for a YEAR! They get foreclosed on.

    The attorneys general and media blame the banks, but I would like to hear the banks’ side of the story. ( B of A reports that their average foreclosed borrower did not make their mortgage payment for 18 months.

  2. bugman says:

    running for gov. looks good! both have problems.

Leave a Reply

Please log in using one of these methods to post your comment:

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

Watch & Listen LIVE