All Fifty States have now joined forces and have opened an investigation against mortgage servicers and banks conducting foreclosures Nationwide. Being led by Iowa's Attorney General, the group task force is investigating the foreclosure practices at these banks and will review thousands of documents looking for fraudulent statements and fake signatures. The task force's goal is to immediately stop fraudulent foreclosure practices, fashion suitable remedies for the missteps that have occurred and to monitor ongoing and future foreclosure actions to ensure compliance with the rule of law.
It has been expressed through various representatives that the banks should consider complying with the requests of the task force and where fraud is found to have occurred, those banks guilty of such fraud should consider working with that affected homeowner for a resolution short of foreclosure.
At issue is the preparation and presentation of various legal documents that are required when filing a foreclosure action in state court. Specifically, the law in most states requires that an affidavit be filed with the foreclosure action that states under penalties of perjury that the documentation, monies owed, and basis for the foreclosure action are all true and accurate. The person signing the affidavit must attest that he or she has personal knowledge of the facts and allegations contained within the foreclosure paperwork and must swear to all of this before a notary public. If you recall, the act that started this tidal wave was an admission by a GMAC/Ally employee that he and his team signed-off on approximately 10,000 foreclosure action affidavits per month without ever reviewing any of the foreclosure paperwork and most importantly without having any personal knowledge of the facts contained within that paperwork. GMAC/Ally has been sued by the Ohio Attorney General as a result of filing countless false affidavits and violating state consumer protection laws as a result of those actions.
After the Ally bombshell, other mortgage companies and banks came forward to disclose that they too may have had some lapses in their foreclosure process. Several of the big banks halted foreclosures across the country in an attempt to review and analyze whether their practices were compliant with state law. Doing that was probably a good thing.
Eerily silent in any of the most recent reports is the connection that major foreclosure law firms may have had with any of the fraud that has occurred at these banks. It is safe to say that the big banks could not have at all times acted alone, but instead it is possible that some of these occurrences could have been facilitated through the assistance of counsel. The fallout from this latest crisis is sure to linger for sometime.