The following is from the NY Banking Department’s website:

October 8, 2010

To the Institution Addressed:

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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.