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Attorneys general investigating foreclosure practices

By: 13 October 2010 One Comment

We’ve talked about problems with foreclosures at First Arkansas News before and we’re doing it again.

Just this morning, Arkansas Attorney General Dustin McDaniel announced that he is joining the other 49 attorneys general in a nationwide investigation of foreclosure practices. Meanwhile, banking regulators in 30 states are also investigating foreclosures.

McDaniel’s announcement came hot on the heels of Bank of America’s decision to halt foreclosures across the nation until it completes an investigation of its own. Ally Financial Inc.’s GMAC Mortgage Unit and JPMorgan Chase & Co are also taking a look at their foreclosures.

McDaniel, in a news release, said the purpose of the investigation effort his office has joined is to look into whether companies made misrepresentations on affidavits and other documents that they reviewed and verified supporting foreclosure documentation, whether companies signed affidavits outside the presence of a notary public, and whether the company was actually the appropriate entity to pursue a foreclosure, along with other possible issues regarding servicing irregularities or abuses.

The attorneys general will take a look at the the sufficiency of documents filed in both current and past foreclosure proceedings raising the possibility of overturning some past decisions. According to RealtyTrac, 2.5 million homes in the U.S. have been lost through foreclosure since the end of 2007.

Back in April, both First Arkansas News and the Daily Record in Little Rock reported on foreclosure problems that came to light during a seminar hosted by Legal Aid of Arkansas in Fayetteville. You’ll find a podcast with foreclosure-fighting attorney April Charney here and an article in the Daily Record about problems with foreclosures here.

“We realize that some foreclosures are necessary, but given the importance of the property right at risk, the process leading to a foreclosure is a serious one and should be above reproach,” McDaniel said in the news release. “Our office has joined this investigation in order to make sure that foreclosing entities have fully complied with our laws.”

The multistate group will contact a comprehensive list of individual mortgage servicers, the news release states. The group’s initial objectives include:

• Putting an immediate stop to improper mortgage foreclosure practices.
• Reviewing past and present practices by mortgage servicers subject to the inquiry.
• Evaluating potential remedies for past practices and to deter future improper practices.
• Establishing a mechanism for more effective independent monitoring of future mortgage foreclosure practices.

We’ll post more information about the investigation as we get it, so stay tuned…

About: Ethan C. Nobles:
Benton resident. Rogue journalist. Recovering attorney. Email = Ethan@FirstArkansasNews.net.

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