All 50 States launch investigation into foreclosure practices

All 50 States launch investigation into foreclosure practices

Accuracy of foreclosure documents target of probe

INDIANAPOLIS, IN – October 13, 2010 – (RealEstateRama) — Indiana Attorney General Greg Zoeller is joining a 50-state bipartisan mortgage foreclosure working group, as part of a coordinated national effort by states through the National Association of Attorneys General (NAAG) to review the practice of so-called “robo-signing” within the mortgage servicing industry.

The Mortgage Foreclosure Multistate Group, comprised of state attorneys general in all 50 states, and state banking and mortgage regulators in 30 states, will investigate whether individual mortgage servicers have improperly submitted documents in support of foreclosures. Specifically, the group will look into whether companies misrepresented on affidavits and other documents that they reviewed and verified supporting foreclosure documentation. The group will also attempt to determine whether companies also signed affidavits outside the presence of a notary public, along with other possible issues regarding servicing irregularities or abuses. Click to view joint multistate group statement

“The joint investigation we are announcing today is an efficient and measured approach to address the common questions state attorneys general have of banks, servicing companies and law firms involved in robo-signing. We need to quickly clear up the unknown aspects that lead to fear of the potential depth and breadth of this problem,” Zoeller said. “While joining in this common investigation I will also be acting independently to best serve the interests of Indiana. That will include our own review of foreclosure documents and seeking information from banks and mortgage servicing agents in our Indiana housing markets.”
Submitting foreclosure documents without verification, with false representation, and/or signing certain legal documents outside the presence of a notary public may constitute deceptive acts and/or unfair practices, and may otherwise violate state laws and court rules.

Zoeller, as chairman of the Consumer Protection Committee of NAAG, will review some of the early results of this investigation with the directors of consumer protection at a meeting to be held in Oregon October 24-26.
The multistate group, through an executive committee, will contact a comprehensive list of individual mortgage servicers.  The group’s initial objectives include:
. Put an immediate stop to improper mortgage foreclosure practices
. Review past and present practices by mortgage servicers subject to the inquiry
. Evaluate potential remedies for past practices and to deter future improper practices
. Establish a mechanism for more effective independent monitoring of future mortgage foreclosure practices

The Mortgage Foreclosure Multistate Group will consult with federal regulators and agencies, including the Mortgage Fraud Working Group of the Financial Fraud Enforcement Task Force (FFETF), which was created in 2009.

“Mark my words, there will be serious consequences if we find that there have been fraudulent documents filed in our state courts,” Zoeller added. “But one consequence that I will work to avoid is allowing this to impact Indiana’s movement toward economic recovery.”

Contact:
Molly Butters
Phone: 317-232-0168
Email: Molly.Butters (at) atg.in (dot) gov

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