Homes are being foreclosed on in record numbers, amidst the housing market collapse. Tuesday is election day, and banks have had their questionable foreclosure process and robo-signers exposed. All of this adds together to create a recipe for disaster, and that is exactly what is happening.
Attorney Generals have started piling on, with Ohio being the latest. Richard Cordray, the Attorney General of Ohio released two letters today criticizing a number of banks he states are trying to paper over fraud committed in foreclosures with temporary fixes that don’t address underlying problems in the banks’ practices. Specifically, Cordray notes Wells Fargo & Co. (NYSE: WFC), Bank of America (NYSE: BAC), JPMorgan Chase (NYSE: JPM), and others as the most egregious offenders. Cordray demanded that the banks vacate any court order or motion that was based on an improper paperwork. He further commented banks would “be well-served to work out a settlement with the borrowers to modify the loans and work out payments.”
This week, several banks have re-started the foreclosure process in many states, claiming that they have reviewed their foreclosure procedures and are resuming evictions. Cordray stated that “The banks are committing fraud on the court, essentially perjury, and then saying ‘Whoops! You caught me! Here’s some different evidence and use that instead.’ I know a lot of judges are not going to take kindly to that.”
Bank of America declined to comment. A Wells Fargo spokeswoman said Friday the company intends to cooperate with Mr. Cordray’s inquiries and doesn’t “believe that any of these instances led to foreclosures which should not have otherwise occurred.” She added that Wells Fargo has “chosen to submit supplemental affidavits out of an abundance of caution.”
A joint fifty state investigation is underway, and this process will likely be dragged out for many month racking up millions of legal bills in the process, for all parties involved.
