BOSTON (LoanSafe.org) – Today, Massachusetts Attorney General Martha Coakley sent letters to four of the nation’s largest lenders GMAC/Ally, J.P. Morgan Chase, Wells Fargo and Bank of America calling on them to suspend foreclosures, foreclosure evictions and sales of foreclosed properties following revelations last week that major lenders were failing to properly review foreclosure documentation. The Attorney General’s Office contacted those major lenders because information became public showing that they routinely submitted affidavits related to the foreclosure process containing information that was not verified or known by the lender’s agent that signed the affidavit.
“We are concerned that major lenders gave scant attention to compliance with state law governing foreclosures, as shown by their cavalier attitude concerning affidavits filed with courts around the country,” said Attorney General Coakley. “We are determined to find out whether and how that lack of care and lack of compliance has impacted foreclosures in Massachusetts where, even though a judge does not review foreclosures, creditors are obligated to show compliance with our state law, including provision of a detailed notice to the borrower.”
In the letters, the Attorney General calls on the creditors to immediately cease foreclosing on homeowners in Massachusetts until they can demonstrate to her office that foreclosure affidavits used since May 2008 were accurate and complete and provided borrowers the protections they are entitled to under the law. AG Coakley’s letter also calls for the companies to identify how they will rectify those instances where borrowers were improperly foreclosed out of their homes and to produce documents showing their affidavit processes. AG Coakley has asked for this information by no later than October 15, 2010.
Over the weekend, AG Coakley called on Bank of America to immediately halt foreclosures in light of revelations that Bank of America agents signed affidavits without verifying information and after Bank of America halted foreclosures in judicial foreclosure states. Though Massachusetts is not a judicial foreclosure state, homeowners still have protections under the 90-day right to cure law, enacted by the Legislature and announced by both Governor Patrick and Attorney General Coakley in May 2008. Among the law’s requirements was that creditors must file a signed affidavit with the Division of Banks 90-days before proceeding with a foreclosure in order to give a borrower a “cooling off” period in order to explore a workout with the lender.