Thursday, October 7, 2010
Associated Press
WASHINGTON
The government is looking into allegations that mortgage lenders in the foreclosure crisis have been evicting homeowners using flawed court papers, Attorney General Eric Holder said Wednesday.
President Barack Obama’s financial-fraud enforcement task force has a mortgage component to it, Holder noted during a news conference.
In a letter Tuesday, House Speaker Nancy Pelosi and dozens of Democratic lawmakers urged bank regulators and the Justice Department to probe whether mortgage companies violated any laws in handling foreclosures and borrowers’ requests for loan assistance.
In Ohio, state Attorney General Richard Cordray is suing Ally Financial Inc. and its GMAC Mortgage division, alleging fraud that could involve hundreds of foreclosures in the state.
Cordray is asking for civil penalties of up to $25,000 for every violation of the state’s consumer laws. The lawsuit was being filed in Lucas County court in Toledo.
Cordray said he has asked for meetings with four other banks — JPMorgan, Bank of America, Wells Fargo and Citigroup — to find out more about their foreclosure processes.
GMAC Mortgage and two other companies have halted foreclosures in 23 states — including Ohio — after evidence surfaced that employees or outside lawyers signed documents without reading them or filed inaccurate paperwork.
Three banks have halted foreclosures in 23 states after evidence surfaced that their employees or outside lawyers signed documents without reading them or filed inaccurate paperwork. Numerous state and federal officials have been ramping up pressure on the mortgage industry over concerns about potential legal violations.
Reps. John Conyers and Carolyn Cheeks Kilpatrick, both Michigan Democrats, said Wednesday that foreclosures should be halted in all 50 states.
Officials in Maryland, Delaware, Texas, North Carolina, Connecticut, California and Massachusetts already have asked lenders to halt foreclosure proceedings while they review lenders’ practices.