Posted on Friday, January 7, 2011
Bank of America Corp., JPMorgan Chase & Co. and four other mortgage lenders and service providers face a possible suspension of foreclosures in New Jersey by Jan. 19, under a judge’s order.
The action, announced today by New Jersey Supreme Court Chief Justice Stuart Rabner, also covers Citigroup Inc.’s mortgage unit, Ally Financial Inc.’s GMAC mortgage unit, OneWest Bank and Wells Fargo & Co. The lenders were implicated in “robo-signing,” the submission of hundreds or thousands of foreclosure claims without personal knowledge of their contents, Rabner said.
The six companies must “show cause why the processing of uncontested residential foreclosure matters they have filed should not be suspended,” under an order by Judge Mary C. Jacobson in state court in Trenton.
“It’s important that the judiciary ensures that judges are not rubber-stamping documents of questionable reliability,” Rabner said today in a conference call with reporters.
Another 24 lenders and service providers with more than 200 residential foreclosure actions apiece in 2010 must “demonstrate affirmatively that there are no irregularities in their handling of foreclosure proceedings,” according to an order by Judge Glenn A. Grant, administrative director of the courts.
First U.S. State
Rabner said New Jersey is the first U.S. state to take such an action. The state’s courts received 21,752 new foreclosures in 2006 and have gotten 65,222 this year, according to Grant’s order. Only 6 percent of cases were contested this year, meaning 94 percent lacked “any meaningful adversarial proceeding,” according to the order.
Thomas Kelly, a JPMorgan spokesman, declined to comment on the New Jersey order. Since September, the New York-based bank has suspended foreclosures in 40 states, including New Jersey, he said. It has resumed foreclosures in some of those states, he said.
Shirley Norton, a spokeswoman for Charlotte, North Carolina-based Bank of America; Gina Proia, a spokeswoman for Detroit-based Ally Financial; Mark Rodgers, a spokesman for New York-based Citigroup; Diane Henry, a spokeswoman for Pasadena, California-based OneWest; and Teri Schrettenbrunner, a spokeswoman for San Francisco-based Wells Fargo, didn’t immediately return calls seeking comment.
OneWest was formed in the aftermath of IndyMac Bancorp’s failure.
Lawyers in foreclosure cases must also certify that they have communicated to employees at the mortgage companies that they have personally reviewed all documents and that they are accurate, Rabner said.
The order is In the Matter of Residential Mortgage Foreclosure Pleading and Document Irregularities, Administrative Order 01-2010.
By David Voreacos Bloomberg