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PNC Bank Suspends Foreclosure Sales

Oct 8, 2010 | Parker Waichman LLP

It looks like PNC Bank will be the next lender to suspend home foreclosure sales in 23 states because of concerns about improperly prepared documents. According to The New York Times, a title insurer received a memo from PNC Bank informing it of the foreclosure sale moratorium, which is to be in place for 30 days.

PNC Bank is the fourth lender to take such action in the past several weeks. Previously, GMAC Mortgage, JP Morgan Chase and Bank of America, announced similar moves. The action came after it was learned that those lenders employed people who could sign foreclosure affidavits so quickly they popularized a new term for them: “robo-signer.” In depositions taken by lawyers for embattled homeowners, some robo-signers said they or their team had signed 10,000 or more foreclosure affidavits a month. Those affidavits say the preparer personally reviewed the files, but in their depositions, the workers acknowledge they had no time to actually do that. In some cases, the affidavits weren’t properly notarized.

According to The New York Times, a spokesperson for PNC Bank would not comment on a moratorium beyond saying that the lender was reviewing its mortgage servicing procedures.

Yesterday, Representative Edolphus Towns (D-NY), chairman of the House Committee on Oversight and Government Reform, called on lenders to voluntarily suspend foreclosures until they complete internal investigations, the Times said.

In a related matter, the White House announced yesterday that President Obama would not be signing a bill that could have made it more difficult to challenge wrongful foreclosures. The bill, which according to Reuters made it through Congress without any debate, requires courts to accept as valid document notarizations made out of state, making it harder to challenge the authenticity of foreclosure and other legal documents.

“Out of an abundance of caution, and to ensure that those unintended consequences don’t harm consumers, the president will send the bill back,” White House spokesperson Robert Gibbs announced yesterday.

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