John Hacker on “the EDGE”,
Federal task force probes foreclosure allegations
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 borrower’s requests for loan assistance.
In Ohio, 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. It could be the first in a wave of suits by state attorneys general over what appear to be widespread problems in documents used by the nation’s largest mortgage lenders.
The lawsuit by the Ohio attorney general claims the company’s employees signed and filed false affidavits to mislead courts. Cordray called the alleged fraud the “tip of an iceberg of industrywide abuse of the foreclosure process.”
A spokeswoman for ally, Gina Proia, said in an e-mail that there was “nothing fraudulent or deceitful” about the company’s practices.
“If procedural mistakes were made in the completion of certain legal documents, GMAC Mortgage reacted proactively to the situation,” Proia said.
In addition to Ally, JPMorgan Chase and Bank of America Corp. have halted foreclosures in 23 states after evidence surfaced that their employees or outside lawyers signed documents without reading them or filed inaccurate paperwork.
State and federal officials have been increasing pressure on the industry over concerns about potential legal violations.
Officials in Maryland, Delaware, Texas, North Carolina, Connecticut, California and Massachusetts have already asked lenders to halt foreclosure proceedings while they review lenders’ practices.
From OC register. Submitted by John Hacker.
Wells Fargo to pay, to end mortgage probe
Wells Fargo & Co. is paying $24 million to end an investigation by eight states into whether lenders acquired by the company made risky mortgages to consumers without disclosing their perils.
The states said loans known as option adjustable rate loans, or “pick-a-payment” mortgages, were deceptive to borrowers. Those particularly toxic loans allowed borrowers to defer some of their interest payments so low that loan debt actually increased every month.
Wells Fargo announced the agreement Wednesday with attorneys general in Arizona, New Jersey, Texas and Washington state.
The loans were made by Wachovia Corp. and a California company it acquired, World Savings Bank.
Wells purchased Wachovia at the end of 2008. Wachovia had already stopped making those loans before the acquisition was complete.
As part of the agreement, Wells has agreed to offer loan assistance worth more than 8,700 borrowers through June 2013, though that amount will depend on how the economy fares during that time.
For more information, call
John Hacker at “the edge” team 949-275-3247 or
go to www.letsgobuyahome.com
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