<"https://www.yourlawyer.com/topics/overview/Wrongful-Bank-Foreclosures-Lawyer-Lawsuit-Attorney">Wrongful foreclosure settlements involving some big lenders could be on the horizon, according to a report from Bloomberg News. It seems the joint investigation into wrongful foreclosures by all 50 state attorneys general is expected to reach separate agreements with the five largest mortgage servicers – Bank of America Corp, JPMorgan Chase & Co., Citigroup Inc., Wells Fargo & Co. and Ally Financial Inc. Between them, the five servicers have 59 percent of the US market, Bloomberg said.
Earlier this fall, several lenders suspended various aspects of the foreclosure process after discovering irregularities in the preparation of court documents. In many instances, the banks outsourced foreclosure processing to “foreclosure factories,†which processed tens of thousands of court documents every month. It now turns out that the foreclosure affidavits processed by those companies were signed by personnel who came to be known as “robo-signers.†In many cases, the robo-signers were not reading or verifying documents where they were signed, and in many documents were not properly notarized.
The banks’ disclosures have prompted multiple investigations, including the one by attorneys general in all 50 states. According to Bloomberg, officials from Bank of America Corp, JPMorgan Chase & Co., Citigroup Inc., Wells Fargo & Co. and Ally Financial Inc. have each had at least one face-to-face meeting with the attorneys general group. The probe will result in individual settlements rather than a global agreement with the servicers. JP Morgan Chase and Bank of America are expected to settle first.
“We’re still a ways away†from reaching agreements, Iowa Attorney General Tom Miller, who is heading up the probe, told Bloomberg. “We’re working very hard to figure out what should be in the settlement.â€
It does not appear that any possible settlements will include criminal charges. Miller went on to say that the focus of the investigation “is to reform the servicing process and that’s inherently civil, not criminal.”
According to the Bloomberg report, attorneys general involved in the wrongful foreclosure probe have suggested that a potential resolution should include improving the loan modification process, barring foreclosures when people are modifying loans and creating a general fund to compensate homeowners who may have been victims of wrongful foreclosures.
The 50-state group “offers one of the most promising avenues to increasing loan modification and servicer accountability that we have seen so far,†Paul Leonard, California director for the nonprofit Center for Responsible Lending in Durham, North Carolina, told Bloomberg.
