Banks to cooperate with state officials on foreclosure inquiry
Banks to cooperate with state officials on foreclosure inquiry
Following the joint investigation being conducted by all 50 states, banks and lenders are showing willingness to talk with state attorneys general regarding measures that could be put in place to prevent a repeat of the robo-paperwork fiasco.
Big mortgage lenders and bank institutions like JPMorgan Chase Co. and Bank of America had suspended foreclosure proceedings after allegations of robo-signing practices to expedite foreclosure proceedings broke out in the open. The controversy revolved around claims that banks and loan services facilitated the use of false documents and unverified signatures to speed up thousands of home seizures.
Aside from the joint inquiry, many states including Colorado are conducting their separate investigations to determine violations of state laws. The coordinated probe also asked banks and lenders to suspend their foreclosures as well as provide the investigators access to submitted documents in order to ascertain the extent of the damage that may have been caused to homeowners by improper foreclosures.
Foreclosure laws vary by state and this could prove to be a difficulty in making uniform settlement with the banks. The attorneys general efforts will have to depend on how intricate a particular state law is with respect to any violation committed and this could determine their ability to effectively act on the consumers' complaints.
Members of the probe's executive committee have been getting a lot of communications from bank representatives and the meetings could pave a way for more cooperation on the part of the lenders.
But state investigators say that they are not aiming for a nationwide halt on all foreclosures, but only want corrective measures to be done to rectify improperly instituted foreclosures and at the same time, to determine the liability for any violation of specific state foreclosure laws.
Among the measures being seen to mitigate the effects of the problem is to offer better and improved home loan modification programs as well as to address promptly the complaints and issues raised by homeowners. Some homeowners who have already turned to loan mod programs have disclosed that they were not offer better payment terms or were even foreclosed during the modification process.
