Posted on Monday, October 4, 2010
U.S. State Officials Investigate After Ally's GMAC Unit Suspends Evictions
By Joel Rosenblatt Bloomberg
JPMorgan Chase & Co., the third- biggest U.S. mortgage servicer, must prove its home foreclosures are legal, and if it can’t, must stop the practice, California Attorney General Jerry Brown said.
JPMorgan is asking courts to delay judgments in pending foreclosure cases while the bank reviews and possibly resubmits statements. JPMorgan said this week it is re-examining foreclosure filings after learning employees may have signed affidavits without personally reviewing underlying records, relying instead on other personnel.
Brown made a similar demand on Sept. 24 of Ally Financial Inc.’s GMAC Mortgage unit, which is being investigated by attorneys general in Texas, Iowa and Illinois after the lender said it would halt some evictions following a discovery of faulty documentation.
“JP Morgan Chase, like GMAC’s Ally Financial, has admitted that its review of key foreclosure documents was a ruse,” Brown said today in an e-mailed statement.
JPMorgan can’t record defaults on mortgages made from Jan. 1, 2003, to Dec. 31, 2007, unless, with “limited exceptions,” the lender had tried to determine whether the borrower is eligible for a loan modification, according to Brown.
Thomas Kelly, a spokesman for New York-based JPMorgan, declined to comment.
Yesterday, Illinois Attorney General Lisa Madigan, questioning whether JPMorgan is violating state consumer protection laws, demanded a meeting with the lender to discuss its foreclosures. Earlier today, Connecticut Attorney General Richard Blumenthal asked the state Judicial Department to freeze home foreclosures for 60 days, citing reports on GMAC and JPMorgan.