Will Massachusetts Attorney General Act on Mortgage Foreclosure Crisis
Our Massachusetts bankruptcy blog recently reported that GMAC Mortgage had stopped all foreclosure proceedings because of improper documentation. Yesterday, JP Morgan Chase announced they too would halt over 50,000 foreclosure actions as a result of in adequate documentation.
Just like in the GMAC case, JP Morgan Chase acknowledged that their employees have been signing affidavits that were not truthful: in a deposition last May, a JP Morgan executive testified that her staff had signed 18,000 legal documents each month without much verification as to accuracy. The resolution of the problem may take weeks, but is not likely to reduce the number of foreclosures filed.
Massachusetts Congressman Barney Frank, Chairman of the House Financial Services Committee, urged Fannie Mae, the federal agency that buys mortgages on the secondary market, to half their work with “foreclosure mill” law firms that do not verify documentation before filing lawsuits to foreclose on homeowners.
The question becomes whether the Massachusetts Attorney General will act. According to an article in today’s Boston Globe blog, the Attorney General is exploring foreclosure litigation. As Boston bankruptcy lawyers, we get calls regularly from folks who are losing their homes; generally they don’t have the resources to fight the banks with their “foreclosure mill” law firms. This is why they may need the resources of the Attorney General to aid in rectifying the situation.