House Speaker Calls for Federal Investigation of Foreclosures
House Speaker Calls for Federal
Investigation of Foreclosures
Nancy Pelosi, the Speaker of the House, instructed the Justice Department on Tuesday to launch an inquiry into the nation's largest lenders, while Maryland joined a growing list of states seeking an injunction on foreclosures until they can investigate claims of fraudulent filings.
Pelosi and a slew of other Democrats, in a letter to US Attorney General Eric Holder, Jr., accused some of the nation's largest banks of evicting home owners with erroneous or flawed court documents while at the same time making it very difficult for strapped homeowners to get foreclosure relief. The group say that their concerns over deep systemic problems in the system have been peaked by reports of hundreds of thousands questionable foreclosures nationwide.
The letter will likely increase pressure on the Obama Administration to become more involved in an issue that they have so far not addressed, and will likely create public demand for a national moratorium on foreclosures while the matter is investigated. The AFL-CIO on Tuesday joined a growing list of consumer groups which has already called for a national halt to foreclosures, though as more states enact their own moratoriums, the national foreclosure rate will fall, anyway.
Housing insiders, meanwhile, have cautioned that a wide-scale ban on foreclosures could overwhelm the court system and harm the housing market by scaring off possible buyers of distressed properties. The problems with foreclosures began to come to light in September when Ally Financial, who received a federal bailout of $17 billion, halted foreclosures in 23 states where property seizures require a court order.
Additional lenders followed Ally's lead, indicating the presence of a number of problems with foreclosure filings, such as the practice of using “robo-signers” who routinely sign off on thousands of evictions monthly without verifying the accuracy of the paperwork. Potentially forged documents were also discovered in a number of foreclosure filings. The 27 states where foreclosures do not require court orders have also seen these issues crop up.
The revelations have generally set off a chain reaction in most states beginning with a state moratorium on foreclosures. Homeowners who've lost their homes through faulty foreclosures have hired attorneys to see if they can get their homes back. A number of judges have promised to re-open foreclosure cases that were improperly approved. Texas this week enacted a moratorium on foreclosures and has demanded that mortgage firms identify those employees who've improperly signed off on foreclosures.
Connecticut similarly halted foreclosures last week, while California specifically banned foreclosures by JP Morgan Chase and Ally, while Colorado halted Ally foreclosures. The states of Iowa, Ohio, Massachusetts, and North Carolina have all either launched inquiries or demanded information from lenders working in those states. Maryland, while taking no official action, has asked lenders to voluntarily halt foreclosures while an investigation is conducted.
Nancy Pelosi, the Speaker of the House, instructed the Justice Department on Tuesday to launch an inquiry into the nation's largest lenders, while Maryland joined a growing list of states seeking an injunction on foreclosures until they can investigate claims of fraudulent filings.
Pelosi and a slew of other Democrats, in a letter to US Attorney General Eric Holder, Jr., accused some of the nation's largest banks of evicting home owners with erroneous or flawed court documents while at the same time making it very difficult for strapped homeowners to get foreclosure relief. The group say that their concerns over deep systemic problems in the system have been peaked by reports of hundreds of thousands questionable foreclosures nationwide.
The letter will likely increase pressure on the Obama Administration to become more involved in an issue that they have so far not addressed, and will likely create public demand for a national moratorium on foreclosures while the matter is investigated. The AFL-CIO on Tuesday joined a growing list of consumer groups which has already called for a national halt to foreclosures, though as more states enact their own moratoriums, the national foreclosure rate will fall, anyway.
Housing insiders, meanwhile, have cautioned that a wide-scale ban on foreclosures could overwhelm the court system and harm the housing market by scaring off possible buyers of distressed properties. The problems with foreclosures began to come to light in September when Ally Financial, who received a federal bailout of $17 billion, halted foreclosures in 23 states where property seizures require a court order.
Additional lenders followed Ally's lead, indicating the presence of a number of problems with foreclosure filings, such as the practice of using “robo-signers” who routinely sign off on thousands of evictions monthly without verifying the accuracy of the paperwork. Potentially forged documents were also discovered in a number of foreclosure filings. The 27 states where foreclosures do not require court orders have also seen these issues crop up.
The revelations have generally set off a chain reaction in most states beginning with a state moratorium on foreclosures. Homeowners who've lost their homes through faulty foreclosures have hired attorneys to see if they can get their homes back. A number of judges have promised to re-open foreclosure cases that were improperly approved. Texas this week enacted a moratorium on foreclosures and has demanded that mortgage firms identify those employees who've improperly signed off on foreclosures.
Connecticut similarly halted foreclosures last week, while California specifically banned foreclosures by JP Morgan Chase and Ally, while Colorado halted Ally foreclosures. The states of Iowa, Ohio, Massachusetts, and North Carolina have all either launched inquiries or demanded information from lenders working in those states. Maryland, while taking no official action, has asked lenders to voluntarily halt foreclosures while an investigation is conducted.
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