Foreclosure Investigators to Settle With Largest Lenders First
Iowa Attorney General Tom Miller, who is heading a joint probe by all 50 states into the foreclosure practices of the nation's lenders, said that the investigation will settle first with the five largest servicers in the country. The five are Bank of America Corp., JPMorgan Chase & Co., Citigroup, Wells Fargo, and Ally Financial. Between the five banks, they originate almost 60 percent of home loans in the US, Miller said.
Miller and the Attorneys General of the other 49 states are investigating whether banks and loan servicers used false documents and improperly notarized signatures in filing hundreds of thousands of foreclosures around the nation. The probe was launched October 13th after Ally, JPMorgan, and BoA announced voluntary freezing of foreclosure practices in response to the crisis. Officials of the five banks have declined to comment on the probe.
The probe was recently expanded to include a number of other mortgage practices, as attorneys general have suggested finding ways to improve the loan modification process. Among the suggestions is creating a rule that would bar servicers from initiating foreclosures while a modification is in process, and the creation of a general fund to compensate homeowners who have been wrongfully foreclosed on.
Miller says that investigators have had at least one face-to-face meeting with representatives from all five of the banks, as well as several phone conversations. Investigators intend to reach individual settlements with each servicer, rather than a global agreement affecting them all. The group is not pursuing any criminal charges against the banks, Miller said, because their overall goal is to reform the servicing process and "that's inherently civil, not criminal," he said.
-- Edited by La Jolla on Wednesday 5th of January 2011 12:36:26 AM
