Bank of America and Chase implicated in foreclosure 'robo-signing' scandal
More than 50,000 foreclosures, evictions and resales of foreclosed homes on home loans held or serviced by GMAC Mortgage were frozen across 23 states; within the week, the California attorney general had asked GMAC to stop foreclosures in the nation's largest state until the company could prove it was complying with state foreclosure laws, Connecticut's attorney general had requested a court order halting all banks from foreclosing on homes there for 60 days and the attorneys general of Ohio and Florida had initiated investigations into GMAC foreclosures.
This week, though, the debacle flew straight up the food chain of the mortgage lending industry. Executives at JP Morgan Chase and the country's largest mortgage lender, Bank of America, have also confessed to signing tens of thousands of foreclosure documents without reading them, causing these banks to also halt foreclosures in the 23 states that require judicial involvement to consummate a foreclosure and evict the former homeowner.
The latest? Yesterday, the federal Office of the Comptroller of the Currency ordered the seven largest mortgage lenders in the country to review their foreclosure processes for flaws in their document management systems.
For tips on what this means to those who are facing or have already experienced foreclosure, and think their documents might have been "robo-signed," check out this report we filed when the Ally Financial/GMAC Mortgage foreclosure mill story first broke.