Nationwide investigation launched against banks in alleged defective foreclosures documents

Nationwide investigation launched against banks in alleged defective foreclosures documents

2010-10-13 23:12:45 GMT+7 (ICT)

NEW YORK (BNO NEWS) -- A multi-state investigation involving all 50 U.S. states is looking into alleged defective legal documents filed by banks in thousands of foreclosures nationwide, prosecutors said on Wednesday.

Several banks - including GMAC/Ally, Bank of America and JP Morgan Chase - have acknowledged filing possibly fraudulent paperwork in foreclosures across the country. The banks employed “robo-signers†who allegedly failed to verify the accuracy of foreclosure affidavits and failed to have documents properly notarized, as required by law.

All 50 states in the nation are participating in the investigation through their attorneys general offices and/or banking regulators.

"At the best, banks engaged in careless negligence, at worst, outright fraud. We will fight to find out what happened, when and why, seeking fair and appropriate remedies for consumers," Connecticut Attorney General Richard Blumenthal said.

"Bankers routinely invoke the rule of law to demand repayment of predatory mortgages they peddled to consumers. The rule of law – requiring proper legal procedure and documentation -- must apply equally to bankers," Blumenthal added.

"Bankers created this monstrous mess, threatening to unfairly force consumers from their homes and undermine their property rights. We will demand accountability and corrective action to resolve this injustice."

Filing defective foreclosure documents is potentially a fraud on the court, which can result in dismissal of foreclosure cases and underlying mortgages.

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