JPMorgan Chase & Co. (NYSE: JPM) to Suspend 50,000 Foreclosures

JPMorgan Chase & Co. (NYSE: JPM) announced that it would be suspending as many as 50,000 foreclosures as the bank reviews the legitimacy of the documents in the cases, following a similar move by GMAC Mortgage LLC last week.

GMAC halted evictions and sales of foreclosed homes in 23 states after they found errors in some of their foreclosure affidavits.  “The error is not related to the accuracy of the underlying transaction or the ultimate decisions to have exercised the foreclosure proceedings,” said GMAC in a statement last week.

JPMorgan Chase & Co. (NYSE: JPM) is now the second major financial institution to halt foreclosures after questions have been raised as to whether or not banks that are filing foreclosure papers actually hold the mortgages on said homes. Because of the way that mortgages were packaged, sold and re-sold up until the financial crisis, it’s not always entirely clear whether or not a bank is holding the mortgage to a given home.

The bank acknowledged that its employees signed certain affidavits about loan documents without personally verifying the files. These documents identify what bank holds the original mortgage note in foreclosure cases. The bank said that some of the information in the affidavits may be inaccurate and asked judges not to enter judgments against homeowners facing foreclosure until a thorough review, which could last several weeks, is complete.

JPMorgan Chase & Co. (JPMorgan Chase) is a financial holding company. JPMorgan Chase’s principal bank subsidiaries are JPMorgan Chase Bank, National Association (JPMorgan Chase Bank, N.A.), a national banking association with United States branches in 23 states, and Chase Bank USA, National Association (Chase Bank USA, N.A.), a national banking association that is the Firm’s credit card-issuing bank. JPMorgan Chase’s principal nonbank subsidiary is J.P. Morgan Securities Inc. (JPMorgan Securities), its United States investment banking firm. Its activities are organized into six business segments: Investment Bank, Retail Financial Services (RFS), Card Services (CS), Commercial Banking (CB), Treasury & Securities Services (TSS) and Asset Management (AM). Its wholesale businesses comprise the Investment Bank, Commercial Banking, Treasury & Securities Services and Asset Management segments. Its consumer businesses comprise the Retail Financial Services and Card Services segments.

Shares of JPMorgan Chase & Co. (NYSE: JPM) traded down 1.39% during mid-day trading on Wednesday.