The launch of a nationwide investigation by state Attorneys Generals into fraudulent foreclosure practices has already elicited a response within the lending industry, including a moratorium on foreclosure sales by Bank of America and others. Alabama became the last state to join the initiative, but the head of a financial lobby group criticizes the move as a threat to the nation’s vulnerable housing recovery. See the following article from HousingWire for more on this.
Alabama Attorney General Troy King announced Wednesday he is joining the other 49 AG offices in a nationwide investigation into lenders that filed faulty foreclosure affidavits.
Earlier Wednesday morning, 49 state attorneys general offices and regulators announced a coalition to investigate lenders that filed faulty foreclosure affidavits. The only AG office missing from the list was Alabama.
“We are troubled to see that mortgage lenders around the country were violating the procedures of our sister States. Accordingly, we are joining the national investigation (all 50 States) to ensure that the lenders’ wrongdoings did not extend beyond what is already known to encompass actions that violated Alabama law and thus adversely affected Alabama citizens,” King said in an e-mailed statement to HousingWire.
King added no violations of Alabama law have been alleged.
“If the investigation does not uncover any wrongdoing under Alabama law, then the lenders have nothing to fear from us,” King said. “If the investigation does uncover wrongdoing in Alabama, we stand ready to take the appropriate action.”
Steve Barlett, president and chief executive officer of the financial firm lobby group, the Financial Services Roundtable, said Wednesday recent investigations and calls for a national moratorium are overblown and hazardous to the already shaky housing market.
Bank of America (BAC: 13.33 -1.41%), JPMorgan Chase (JPM: 39.775 -1.55%), Ally Financial (GJM: 23.19 -0.69%), Goldman Sachs’ (GS: 154.82 -0.25%) Litton Loan Servicing, [[PNC Financial]] and OneWest Bank have each either began a review of documents or suspended foreclosure sales in at least 23 states where employees signed affidavits without reviewing the documentation or having a notary present.
“We look forward to working with the attorneys general,” Thomas Kelly, a spokesman for JPMorgan Chase said.
BofA suspended foreclosure sales in all 50 states, and Ally began a review of all its foreclosures cases across the country.
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