News: NY Banking Dept. Requests Suspension of Foreclosure Actions
The following is from the NY Banking Department’s website:
October 8, 2010
To the Institution Addressed:
Recent events surrounding the foreclosure process of several mortgage loan servicers and the use of individuals identified as “robosigners” to execute affidavits without proper verification have raised considerable concerns for the Banking Department.
As you may be aware, on September 20, 2010, Ally Financial halted foreclosures in several states after discovering that faulty affidavits were filed in foreclosure cases. Specifically, Ally indicated that certain individuals executed affidavits without personal knowledge of the allegations contained therein. Subsequently, JP Morgan Chase and Bank of America made similar announcements concerning documents filed in foreclosure actions.
Given the extent and severity of the issues raised, the Department is requesting that [Institution Addressed] conduct an internal review of its foreclosure practices in New York and provide a response by October 22, 2010 to the following:
- The steps you are taking or have taken to review your foreclosure process in New York;
- The results of your review, including a description of the process for verifying affidavits submitted in support of foreclosure actions in New York and which, if any, of your employees or agents have executed foreclosure documents without direct personal knowledge of the facts or with other irregularities;
- The corrective action, if any, you have taken or intend to take in response to the results of your internal review;
- The measures taken to ensure that affidavits filed in New York foreclosure actions are executed in compliance with New York law; and
- The status of pending foreclosure actions (including foreclosure sales and evictions) in New York and the measures taken to suspend such actions pending your review and corrective action.
In the interim, we are requesting that [Institution Addressed] suspend foreclosure actions in New York until such time as it has conducted a thorough analysis of its foreclosure practices and determined that such practices are in compliance with New York law.
Please visit our Foreclosure category to learn more about foreclosure issues.
News: BOA Halting Foreclosure Sales In All 50 States
The Wall Street Journal reports that Bank of America (BOA) is placing a moratorium on all “foreclosure sales” across the U.S. (see below). However, BOA hasn’t halted all foreclosure proceedings (see our earlier post Major Banks Halting Foreclosures in NY?). Additionally, it appears that a BOA spokesperson is implying that BOA’s completed foreclosures were proper.
Bank of America Corp. said it is placing a moratorium on all foreclosure sales across the U.S., amid political pressure on U.S. banks to examine foreclosure-documentation problems.
The nation’s largest bank by assets is the first financial institution to stop all foreclosure sales amid revelations that the banking industry had used “robo signers,” people who sign hundreds of documents a day without reviewing their contents, when foreclosing on homes. Bank of America, J.P. Morgan Chase & Co. and Ally Financial Inc. (parent of GMAC Mortgage) last week postponed foreclosures in 23 states where a court’s approval is required to foreclosure on a home.
Bank of America also decided Friday to review the affidavits being used in foreclosure proceedings in the rest of the 50 states so the accuracy of the documents can be assessed.
Thus far “our ongoing assessment shows the basis for our past foreclosure decisions is accurate,” a Bank of America spokesman said.
The decision by Bank of America to extend its postponement to all 50 states takes effect Saturday. The bank doesn’t intend to lift the moratorium on foreclosure sales until its assessment is complete, a spokesman said. The bank hasn’t halted all foreclosure proceedings, however. If a borrower is delinquent, the bank is still issuing notices of default and pursuing efforts to modify certain mortgages, the spokesman said.
On Thursday, Rep. Edolphus Towns (D., N.Y.), chairman of the House oversight committee, became the latest lawmaker to call for a nationwide moratorium on foreclosures.
Please visit our Foreclosure category to learn more about foreclosure issues.
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