According to a recent article in USA Today, the foreclosure rate across the country has dropped roughly 6 percent, as state and federal investigations are conducted on foreclosure cases in 23 states that require court approval. There has also been heavy coverage by the media regarding foreclosure errors, where many mortgage companies failed to follow proper legal procedures in thousands of foreclosures. There is an estimated 1 million homes in the midst of foreclosure in the U.S., and with news of faulty methods by mortgage servicers being reported, many homeowners are hiring attorneys to help challenge foreclosure actions.
In Florida, circuit courts have reported more than two out of three cancelations in foreclosures, while the normal ratio is less than one out of three. The delay has been attributed to banks, which are slowing processes down as reports of “robo-signers” have recently come to light. Many U.S. states require verification that documents in a foreclosure process are accurate, and in some cases must be signed by a notary.
Bank of America has reported that it will refile affidavits in over 100,000 foreclosure actions within the 23 states requiring judicial approval. It will then complete a state-by-state review of their foreclosure documents in the remaining 27 states. JPMorgan Chase has stated it will need to refile approximately 115,000 affidavits in 41 states. They have temporarily suspended foreclosure completely within those states. Other mortgage companies and banks have found themselves in the same situation.
Once the affidavits are refilled, foreclosures in those states will begin again, pending a judge’s ruling in each case. Many judges are now demanding more information from mortgage servicers with the recent revelation regarding faulty paperwork and robo-signers. Some companies have failed to produce proof of ownership of the actual mortgage note when attempting foreclosure on a house. This typically occurs when mortgages are transferred from lenders to investors, and sometimes even to other investors.
In New York, courts are requiring that mortgage company’s attorneys to do their part, not just judges, to ensure that foreclosures are properly handled. A new rule that effects an estimated 80,000 pending foreclosure cases, requires attorneys to sign an affirmation stating that they reviewed all foreclosure documents and asked the lenders and banks to verify the accuracy of the documents. Any attorney who files a fraudulent affirmation would face court sanctions. Other states are considering instating similar rules.
Unethical action on the part of mortgage companies and banks affects all Americans. For information about New Jersey foreclosure and bankruptcy, please contact the Law Offices of Robert Manchel. Our New Jersey foreclosure and bankruptcy attorneys will assist you during this difficult time. Call today at 866-503-5655.