Georgia Joins Nationwide Foreclosure Investigation
After several large mortgage lenders halted foreclosure auctions and evictions after widespread claims of illegal foreclosure practices, Georgia is joining with several other states in an investigation of the allegations.
The complaints allege that the employees of large lenders falsified documents and engaged in what is being called “robo-signing”, which is when bank employees sign or approve documents without reading them, a violation of state law.
The current allegations are in regards to the 23 states in which judicial approval is required before a foreclosure eviction or auction can take place. Employees have confessed to filing affidavits that falsely swear to the accuracy of court documents. In one extreme case, a Bank of America employee admitted to signing 8,000 foreclosure documents without reading them, despite having previously declared to a judge that she had done so. JPMorgan Chase and PNC have suspended foreclosures in the 23 states, while Bank of America and Ally Financial have halted them nationwide.
In the 27 states, including Georgia, in which judicial approval is not required for foreclosure, officials are more concerned about the occurrence of robo-signing and similar practices. Because foreclosure actions don’t go before a judge, it is more difficult to detect – and prove – illegal actions. Therefore, states are joining forces in an effort to investigate and stop the improper practices, led by Iowa Attorney General Tom Miller.
It is not yet clear what the investigation will entail, but it may vary in each state, as each will have different laws and procedural requirements for foreclosure. One thing that is certain, according to Emory University Law Professor Frank Alexander, is that the paperwork portion of the foreclosure process will be examined very closely.
Alexander says the effects of the investigation will vary from homeowner to homeowner. “For some individuals, this will be a short-term reprieve,” he said, “but in other situations, we will hopefully prevent foreclosures from occurring that never should have occurred in the first place.”
Source: Atlanta Journal-Constitution, “Georgia to investigate foreclosures”, Michelle E. Shaw, 12 October 2010