Mortgage Fraud – First in Making Loans, Now in Foreclosures

Bankers and lenders today have been in hot water ever since this trend of the house market crash. Apparently, these bankers are taking the disadvantaged position of people for their own benefit. We have heard of the popular institutions like the Ally Financial Inc. and the JP Morgan Chase & Co facing suits allegedly for processing foreclosures unlawfully.

Discovery and action against fraud in foreclosures began with Ally needing to suspend their massive eviction proceedings because they were sued by the state of Maine for different cases. The state contends that the company is rushing foreclosure documents to the extent that ordinary employees are signing them. Legally, a notary public should be the one to sign it and only after the all the information relative to the mortgage has been examined and reviewed.  To their defense, the Ally spokesperson said that they are being extra cautious in trying to maintain the integrity of the foreclosure and eventually eviction processes. The spokesperson further said that the company in confident that if ever there were processing errors committed, they are sure that it did not result to undue foreclosures.

Next to Ally is Chase. It has been on the hot seat for a long time now also because of alleged fraud in processing foreclosures. Recently, it has had to stop evictions and foreclosures on more than 50,000 cases coming from 23 states because of the issue. Ohio has already pronounced that investigations on the possible abuses of the company are soon to ensue. Just like in the case of Ally, Chase is also being accused of processing mortgage foreclosure documents without it being notarized. This may sound like trivial to this huge company but it has to be given more than enough attention because that is required by the law. Besides, the facts and circumstances must be carefully studied by professionals because proper housing is not something that you just take away from people.

According to Thomas Cox, a lawyer for the state of Maine, in an interview with the New York Times, huge companies are trying to manufacture foreclosures like they would with any profitable merchandise. They want it to happen fast so that sales will bloat and profits will come in like crazy. Well they can’t do that for long before starting to make a stink. The investigations being conducted are now very much widespread such that no foreclosures are yet allowed in many states despite the contention of Ally and Chase that there was really no fraud in their processes.

Because of this issue, the Old Republic National Title, a well- known insurance company has been ordered to deny insurance to the properties that have been foreclosed on by the two companies. This is something that could pull down the revenues for Ally and Chase. If they want to come back from all of this scandal, an admission of error is the first step they should take.

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