Foreclosure Approval Scandal Slows Foreclosure in Many States
According to the New York Times, an alarming discovery about foreclosure filings has led to the halt of many pending foreclosures with mortgages through JPMorgan Chase and GMAC.
Sources note that the problem was uncovered when several foreclosure victims and their lawyers looked into the paperwork behind the foreclosure process and found that some of the banks’ employees were allegedly signing as many as 10,000 documents per month – in other words, foreclosure paperwork was moving through the system too quickly to be adequately processed.
“Robo-Signers” and Halted Foreclosures
According to the Times, the situation looks something like this:
- A glut of delinquent homeowners: It’s no longer news that millions of Americans are having trouble making mortgage payments, largely as a result of the bursting of the real estate bubble in 2007. And while a national foreclosure crisis is bad news for pretty much everyone, it’s bad news and a lot of paperwork for the banks that hold mortgage loans.
- A push for quick turnover: To address the problem of too many foreclosures to get through, it seems that some banks have “streamlined” the process to the point that some of their foreclosure proceedings may not have followed all the rules.
- “Robo-signers” discovered: When lawyers for struggling homeowners delved into the case, it seems they found that some bank employees responsible for processing foreclosure documents were signing as many as 10,000 foreclosure forms per month (which, according to some sources, translates to a rate of about one per minute – far from adequate time to review the information in the forms).
Sources note that JPMorgan Chase has paused 56,000 foreclosures because of questionable procedures, which means that homeowners who were in danger of losing their residences may have a new window of hope.
Stopping Your Home’s Foreclosure
In light of this discovery, now may be the time to take action if your home is in danger of being foreclosed on. If you have not yet taken steps to challenge or fight your foreclosure, consider following these steps:
- Contact a lawyer. An attorney will likely be able to help you sift through documents and figure out whether there is any chance your lender may be foreclosing without following proper procedures (as happened in the case mentioned above).
- Consider Chapter 13 bankruptcy. One option for at least pausing foreclosure for three to five years is filing Chapter 13 bankruptcy, which typically prevents all collection actions for the duration of the case through the automatic stay. In the meantime, you may be able to catch up on your mortgage payments or make alternate living arrangements.
- Don’t delay. In most foreclosure cases, acting sooner rather than later maximizes a homeowner’s chances of finding a workable solution. So if you’re worried about missed payments or a soon-to-increase monthly bill, contact your lender today.
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- “Foreclosure-Gate” Causing Chaos In The Mortgage Industry
- Risky Legal Strategy Wins Big for Maryland Homeowners
- Housing Prices Hit Eight-Year Low
- Long Island Foreclosure Cases Are Up
- Bad News for Foreclosure Modification Program HAMP
