Tags: US | Foreclosure | Mess

AP Source: FBI Looking at Foreclosure Mess

Tuesday, 19 Oct 2010 08:51 PM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink

WASHINGTON (AP) — A federal law enforcement official says the FBI is in the initial stages of trying to determine whether the financial industry may have broken criminal laws in the mortgage foreclosure crisis.

The law enforcement official says the FBI is at the start of a lengthy sorting-out process in which agents will look into what caused the financial institutions to mishandle the flood of paperwork in the historic avalanche of foreclosures.

The official says the question is whether financial institutions were acting with criminal intent or were simply overwhelmed by events in the wake of the housing market's collapse. The official spoke on condition of anonymity because the investigation is just getting under way.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

WASHINGTON (AP) — Big lenders are trying to move past the foreclosure-document mess, saying they're now confident their paperwork is accurate.

Yet they face so much organized resistance that they can't just snap up their briefcases, declare the crisis over and move on.

Consider the opposition:

— Attorneys general in all 50 states are jointly investigating whether lenders violated state laws.

— Lawyers for evicted homeowners are preparing lawsuits against major lenders.

— State judges have signaled they will review the banks' foreclosure documents with skepticism.

— Lawmakers on Capitol Hill plan to hold hearings.

The document crisis, in other words, appears far from over.

Statements on Monday by Bank of America Corp. and GMAC Mortgage that they are resuming foreclosures in the 23 states that require a judge's approval brought a wave of denunciations from public officials Tuesday. Attorneys general and other officials said bank officials could face civil — and potentially criminal — charges for flouting court procedures in handling foreclosure documents.

Hundreds of judges around the country have the authority to penalize bank officials who violate their procedural rules. They could also force thousands of foreclosure cases to go to full trials rather than issue a quick ruling.

Judges won't take well to banks that filed erroneous documents with their courts, said Indiana Attorney General Greg Zoeller.

"There could be some serious consequences," including criminal charges, Zoeller said.

Even if there aren't, lawsuits are likely to continue for years, said Guy Cecala, publisher of trade publication Inside Mortgage Finance.

"Some of these plaintiffs' attorneys clearly smell blood in the water," Cecala said.

Bank of America and GMAC say they have yet to find mistakes in the documents they've reviewed so far.

The banks' decisions came several weeks after they began halting some foreclosures. They froze those cases amid allegations that their employees signed but didn't read documents that may have contained errors.

State officials argue that the systems the banks used to process foreclosures were inherently flawed and likely remain so. They are vowing to push ahead in their investigations.

"While they are telling us that they have fixed those problems, we can't just take their word for it," said Patrick Madigan, an assistant attorney general in Iowa who is spearheading the 50-state investigation. "We intend to independently verify whether the problems have been fixed."

Some judges say the document problems are persisting.

Justice Arthur Schack of State Supreme Court in Brooklyn, who's gained national attention for throwing out flawed foreclosure cases, said he's still finding errors. In a stack of foreclosure cases sitting on his desk, he said he found flaws in most of them after a 10-minute once-over.

"It's nice of Bank of America to issue a press release," Schack said. "But they'd better file all their paperwork and makes sure it's done correctly, because they're asking me to take someone's house away."

Florida has been the state most affected by the document mess. Officials there say they're skeptical that banks have managed to resolve their paperwork problems so fast.

Chief Judge J. Thomas McGrady of Florida's 6th Judicial Circuit on Florida's Gulf coast, said judges in his circuit will scrutinize foreclosure documents, case by case.

Peter Ticktin, a Florida plaintiffs' attorney, said, "Pragmatically, it is impossible" for the bank to fix documents so quickly.

Bank of America says it will begin next week to refile documents for more than 100,000 foreclosure cases. CEO Brian Moynihan said on a conference call Tuesday that employees who have reviewed the bank's documents have found no inaccurate information that "would affect the plain facts of the foreclosure."

Attention will shift next month to Capitol Hill, where House and Senate lawmakers have scheduled hearings.

Rep. Maxine Waters, D-Calif., said Tuesday that she was "disappointed by Bank of America's rush to resume foreclosures after such a short review." Waters has introduced legislation that would bar lenders from foreclosing without offering homeowners any assistance.

Consumer advocates and some lawmakers, meanwhile, argue that banks need to do far more than refile and re-sign piles of flawed documents. They say the banks must correct the way they handle foreclosures and requests for aid from distressed homeowners. Those efforts have been widely criticized as inadequate.

The White House has said federal agencies are investigating the allegations of flawed foreclosure documents. But the Obama administration has rebuffed calls for a national halt to foreclosures. It says doing so could hurt the housing market by making it harder for buyers of foreclosed homes to complete their transactions.

Housing and Urban Development Secretary Shaun Donovan, Treasury Secretary Timothy Geithner and other officials plan to meet on the issue Wednesday.

___

AP Business Writers Janna Herron and Pallavi Gogoi contributed reporting from New York. Associated Press Writer Tamara Lush contributed reporting from St. Petersburg, Fla. Associated Press Writer Darlene Superville contributed reporting from Washington.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

GOP Frustrated With Iran Nuclear Talks

Tuesday, 25 Nov 2014 22:08 PM

Republican lawmakers are venting their frustrations with Secretary of State John Kerry's admission that the United State . . .

Britain: 40 Terror Plots Thwarted Since 2005

Tuesday, 25 Nov 2014 22:04 PM

British security services have blocked 40 terrorist attacks in the past nine years, according to Home Secretary Theresa  . . .

Obama Takes on Hecklers Over Immigration Policy

Tuesday, 25 Nov 2014 20:00 PM

Taking on the hecklers who've been interrupting his speeches lately, President Barack Obama argued back Tuesday with a p . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved